Since the middle of 2017, the official statement regarding the formation of debt by local governments through various financing entities has changed. Compared with the previous formulation of "non-financial corporate liabilities," the recent central leadership's expression of "local government implicit debt" is closer to the reason and essence of the current high leverage in China's economy. The steady and orderly resolution of local implicit debt is the key to preventing and resolving major financial risks.Since 2010, the China Banking Regulatory Commission has implemented a "list system" management of government financing platforms. The central document stipulates that local government financing platforms are economic entities established by local governments and their departments and institutions, affiliated institutions, etc. through financial appropriations or injection of land, equity and other assets, which have the function of investment and financing of government public welfare projects, and have independent corporate legal entities. Estimating the implicit debt scale of some local governments in various provinces in China shows that the provinces with more total debts and interest-bearing debts of local financing platforms are Jiangsu, Zhejiang, Sichuan, Tianjin, and Chongqing.
