The Chinese Communist Party’s Central Commission for Discipline Inspection and the Ministry of Finance once again reported typical cases of hidden local government debt, revealing that Wu Shenghua, former member of the Guizhou Provincial Party Committee and former secretary of the Bijie Municipal Party Committee, has been ignoring old debts since taking on a new role, openly stating multiple times, “The debts were owed by the previous administration, why should I be responsible for paying them back.” Analysts believe that as the Chinese economy continues to decline, the local debt issue is intensifying power struggles within the government, escalating the game between the central and local authorities.
On September 11th, the Central Commission for Discipline Inspection and the Ministry of Finance reported six typical cases of local government hidden debt accountability, with the first case involving Wu Shenghua.
The report stated that during Wu Shenghua’s tenure as secretary of the Bijie Municipal Committee from 2022 to 2025, he neglected debt management, allowing irregular debt practices to flourish. He made statements in public venues like, “The debts were owed by the previous administration, why should I be responsible for paying them back.” The city’s debt balance increased during his term, with the debt restructuring completion rate reaching only 20% in 2024, ranking Bijie City last in Guizhou Province.
Public records show that Wu Shenghua, born in October 1966 in Duyun, Guizhou, had been working in Guizhou for a long time. In 2020, he served as Vice Governor of Guizhou Province, became a member of the Guizhou Provincial Party Committee in April 2022, and then held positions as a member of the Guizhou Provincial Party Committee and secretary of the Bijie Municipal Party Committee from May of the same year until his downfall on July 24, 2025. He was a candidate member of the 19th and 20th Central Committees of the Chinese Communist Party.
Chinese media previously reported that Wu Shenghua was the first senior official to be held accountable for “ineffectively implementing the major decision-making arrangements of the Party Central Committee for preventing and resolving local debt risks.”
The other five cases reported by the Central Commission for Discipline Inspection and the Ministry of Finance included Lan Hongbin, former Deputy Mayor of Yibin City, Sichuan Province, who, while serving as secretary of the Party Committee of the Yibin Lingang Economic and Technological Development Zone and deputy secretary of the Party Committee and director of the Management Committee of the Yibin Sanjiang New Area, was involved in the accumulation of hidden debts totaling over 3.77 billion yuan.
In the Weiwei District of Weinan City, Shaanxi Province, public hospital debt was used for public welfare projects, resulting in an additional hidden debt of 100 million yuan. Cao Jie, then secretary of the Party Committee and director of the Health Bureau of the Weiwei District of Weinan City, was held accountable. In Jieshou City, Jiashu City, Anhui Province, hidden debts were resolved inaccurately, totaling 140 million yuan. Li Pan, chairman of the Jieshou City Urban and Rural Construction Development Group, was also held accountable.
In the Jiujiang Economic and Technological Development Zone of Jiangxi Province, the inaccurate resolution of hidden debts amounted to 1 billion yuan, and You Xi, director of the Financial Comprehensive Service Center of the Development Zone, was held accountable. In Yinchuan, Ningxia, the inaccurate resolution of hidden debts reached 1.8 billion yuan, with Wang Rongya, the general manager of the Yinchuan Binhe Yellow River Bridge Management Company, among those held accountable.
According to public reports, since 2022, a total of over 50 cases of violations related to hidden local government debts and financing accountabilities have been publicly reported or exposed in various batches by official sources.
The colossal debts accumulated by local governments in China over the years have always been a major potential risk for its financial system. In 2024, the Chinese government introduced a 1 trillion yuan debt restructuring plan to alleviate the immense debt pressure of local governments.
The latest data released by the Chinese Ministry of Finance in September 2026 showed that as of the end of July 2026, the balance of local government debt nationwide had further increased to 59.24 trillion yuan. However, this figure only accounts for the publicly disclosed statutory debts and does not include the significant hidden debts of local governments or the operational debts of entities such as urban investment platforms.
Regarding hidden debts, official sources claim that by the end of 2025, the remaining balance of hidden local government debts nationwide had rapidly decreased to 6.5 trillion yuan. Compared to the base of 14.3 trillion yuan in hidden debts recognized by official sources at the end of 2023, this marked a significant reduction of 7.8 trillion yuan over two years.
However, international institutions, foreign investment banks, and independent think tanks estimate that there is still a huge gap of up to ten times between the latest figures on hidden local government debts in China and the official data provided by the Chinese authorities.
Local financing platforms are referred to as the black hole of China’s financial system by the industry. Data released by the International Monetary Fund (IMF) in early 2026 shows that by the end of 2025, the total debt of China’s urban investment platforms (LGFV) had expanded to 71.4 trillion yuan, exceeding half of China’s GDP.
Regarding the occasional blame on officials by the Chinese authorities for ineffective debt management, Liang Shaohua, a former lawyer at Beijing Construction Bank, commented to Epoch Times that the Party now attributes these local debt issues to officials in order to satisfy both higher-ups and subordinates. The Party is now in a period where debts are getting larger as they are pushed forward. Officials aim to avoid any scandals during their tenure, passing problems onto the next official or pressuring banks to release funds to pay off old debts with new debts. This is the common practice in the Chinese Communist Party’s bureaucracy of shifting blame among themselves.
Chinese-American scholar Li Hengqing stated that it is selective when the central government chooses to hold individuals accountable. For instance, in the past, Tianjin built a large number of skyscrapers in the Binhai New Area, claiming to create an eastern Manhattan but ended up becoming a ghost town, leaving behind debts of 50 billion yuan, managed by the current Vice Premier of the State Council, He Lifeng. However, Xi Jinping will not go after He Lifeng.
Dissident former Communist Party official Du Wen, currently in exile overseas, revealed that while in prison, he discussed with a group of fallen senior Communist officials the tipping point for the collapse of the Chinese Communist Party, with one official stating that it will definitely be the local debts that crush the Party.
Political commentator Li Linyi expressed that as the Chinese economy continues to decline, the local debt issue is exacerbating power struggles within the Chinese Communist Party. The entire debt restructuring process of the Party is essentially a game between the central and local authorities, turning debt restructuring into a political drama. The debts could weigh down the Party indefinitely and could potentially bring down the communist regime in due course.