中國地方政府債務問題近年不斷發酵，截至二〇二五年四月，顯性債務餘額已突破五十點六九兆元人民幣，龐大的隱性債務更難以統計。若此危機無法獲得有效紓解，地方財政將難以為繼，並可能在經濟、金融、房地產、就業、社會穩定以及國際信用等層面觸發一連串負面連鎖反應。

首先，在財政層面，一些城市的債息已佔財政支出的高比例，例如鄭州超過六成、大理及烏魯木齊亦遠高於「付息不超過十分之一」的警戒線。依據《地方政府性債務風險應急處置預案》，一旦觸及警戒值便須啟動財政重整計畫。屆時地方政府勢必削減公務員薪資凍結編制、壓縮公共服務與基建支出並暫停在建專案，基層治理與民生保障將首當其衝。為了續命，地方多以「借新還舊」維繫資金鏈，二〇二五年再融資債券發行量年增近一倍；然而只要市場對地方債信用產生疑慮，發行失敗或利率飆升即會令資金流斷裂，財政崩潰的風險驟增。

隨著財政惡化，金融體系也難置身事外。政策性銀行和地方性商業銀行長期深度綁定地方融資平台，若出現債務違約，巨額不良資產將危及金融穩定，甚至引發區域性銀行危機。另一方面，城投債、信託和私募產品等影子銀行體系將面臨連鎖違約，企業融資環境勢必急速惡化。

地方財政對土地出讓金的高度依賴，使得房地產市場成為鏈條上的關鍵環節。房市低迷導致土地流標率上升，地方政府基金性收入大幅縮水，進一步削弱其償債能力。與地方財政唇齒相依的房企則因政府拖欠工程款而陷入流動性危機，「保交樓」資金缺口擴大，烂尾樓與交屋糾紛恐更加常見，房地產風險將再度向金融與社會層面傳導。

基建投資收縮意味著對鋼鐵、水泥等上游行業需求驟降，成千上萬的農民工就業成難題。投資與消費信心雙雙下滑，經濟增速陷入下行通道，失業率同步走高。財政緊縮下，部分地區已出現教師與公務員降薪或延期發薪的情況；若拖欠情形蔓延，可能引發抗議甚至群體性事件，基層治理結構面臨前所未有的壓力，社會穩定度大打折扣，民眾對政府信任亦隨之動搖。

此外，國際層面的衝擊亦不容忽視。倘若地方債風險擴散至整體財政體系，穆迪、標普等機構可能下調中國主權信用評級，海外融資成本隨之攀升。同時，外資對中國市場的長期預期將趨於保守，可能削減在華投資規模並加劇資本外流，進一步推高金融市場波動與匯率壓力。

面對多重風險疊加，中國中央已透過二〇二五年度兩兆元的化債額度推動債務置換，並嚴控新增隱性債務、持續推進財稅體制改革。然而，要真正化解危機，仍須提高地方稅源自主性，優化債務期限與成本結構，同時確保資金使用效率，避免低效與重複建設。若改革得當，中國有望穩住局面，反之，地方債恐成為經濟長期隱伏的「灰犀牛」，對國家整體發展構成深遠挑戰。

China’s local government debt problem has continued to escalate in recent years. As of April 2025, the outstanding explicit debt had exceeded 50.69 trillion yuan, while the scale of hidden debt remains even more difficult to quantify. If this crisis cannot be effectively resolved, local fiscal systems will become unsustainable, potentially triggering a chain of negative reactions across the economy, financial system, real estate sector, employment, social stability, and even China’s international credit standing.

From a fiscal perspective, some cities are already facing dangerously high debt-servicing burdens. In Zhengzhou, for instance, interest payments account for over 60% of fiscal expenditure. Similar situations have been reported in Dali and Urumqi, far exceeding the official warning threshold of 10%. According to the “Contingency Plan for Local Government Debt Risk Response,” once a locality breaches the warning level, it must initiate a fiscal restructuring program. This typically involves wage cuts or hiring freezes for civil servants, reductions in public services and infrastructure investment, and the suspension of ongoing construction projects. These measures are likely to hit grassroots governance and essential public welfare the hardest.

To maintain financial continuity, many local governments have resorted to “borrowing new to repay old,” leading to a near doubling in the issuance of refinancing bonds in 2025. However, should market confidence in local government credit erode, failed bond issuances or soaring interest rates could rapidly sever funding channels, greatly increasing the risk of fiscal collapse.

As local finances deteriorate, the financial system cannot remain unaffected. Policy banks and regional commercial banks are heavily exposed to local government financing vehicles (LGFVs). A wave of debt defaults could result in massive non-performing assets, threatening overall financial stability and possibly triggering regional banking crises. Additionally, the shadow banking sector—comprising local government bonds, trusts, and private equity products—may experience a cascade of defaults, further tightening the corporate financing environment.

The real estate sector, long intertwined with local government finances through land sales, represents another critical link in this chain. The ongoing property market downturn has led to rising rates of land auction failures and a sharp decline in land sale revenues, which weakens the ability of local governments to repay their debts. Real estate developers, reliant on government payments for construction projects, are facing liquidity crises. The funding gap for ensuring the delivery of pre-sold homes (“guaranteed completion”) continues to widen, raising the risk of unfinished buildings and legal disputes, which may further spill over into financial and social domains.

The contraction of infrastructure investment also spells trouble for upstream industries such as steel and cement, posing a major employment challenge for millions of rural migrant workers. Investment and consumer confidence have both declined, pushing economic growth downward and unemployment upward. In some regions, budget tightening has already led to salary cuts or payment delays for teachers and civil servants. If such delays become widespread, public protests or large-scale unrest may emerge, placing unprecedented pressure on local governance and undermining social stability and trust in government.

On the international front, the implications are equally serious. If local debt risks spread to the national fiscal system, credit rating agencies like Moody’s and S&P could downgrade China’s sovereign rating, raising the cost of overseas financing. Foreign investors’ long-term expectations for China may turn increasingly cautious, potentially leading to reduced investment and accelerated capital outflows, which would exacerbate financial market volatility and currency pressure.

In response to these mounting risks, China’s central government has launched a 2-trillion-yuan debt-swap quota for 2025 to help replace old debt, while also tightening control over new hidden liabilities and continuing to advance fiscal and tax system reforms. However, a lasting solution requires more than temporary relief. It demands enhanced local revenue autonomy, an optimized debt maturity and cost structure, and strict oversight to ensure efficient use of funds while avoiding low-efficiency and redundant projects. If implemented effectively, these reforms could help China stabilize the situation. If not, local debt may evolve into a long-term “gray rhino”—a massive but foreseeable threat—that poses profound challenges to the country’s overall development.