2026 Special New and Refinancing Bonds Top RMB 2.7 Trillion; Local Debt Resolution Exceeds RMB 6 Trillion

2026 marks a critical window as China's local government hidden debt resolution approaches its final phase. In terms of issuance pace, debt-resolution efforts have continued to intensify in 2026, with combined issuance of special new special bonds and special refinancing bonds in the first eight months exceeding RMB 2.7 trillion. February and June saw particularly strong phased deployment, with monthly debt-resolution funds accounting for over 40% of local bond issuance.

In terms of overall progress, the pace of local hidden debt resolution is running ahead of the policy deployment set in 2024. For the package of debt-resolution measures, usage quotas for both 2024 and 2025 exceeded RMB 2 trillion each, while issuance in the first eight months of 2026 has already surpassed RMB 1.8 trillion, bringing cumulative resolution to over RMB 6 trillion. Meanwhile, 2025 saw RMB 1.4 trillion in special new special bond quotas used, exceeding the annual plan, and the first eight months of 2026 have seen RMB 890 billion issued. Overall, both core debt-resolution funding tracks are landing faster than planned.