This is based on our expectation that the country's fiscal system will remain stable and that provincial governments' special status in the LRG hierarchy will prevail. We also expect Beijing to continue to provide exceptional support to provincial governments in stressful scenarios, considering their critical role as the central governments political and managerial extension in regions. In addition, we believe the growth in the tier-one LRGs' debt burden will be balanced out by revenue growth, supported by transfers from the central government and a modest deficit. The tier-one LRGs can stay the course of derisking debts embedded in local SOEs, including control over excessive public spending through GREs. That should help to stabilize the debt burden. While remote, upside would
