SINGAPORE (S&P Global Ratings) May 23, 2025--China's tier-three local and regional governments (LRGs-- mostly districts and counties, face a risk of continued high fiscal imbalances and fast growing debt burdens. Overall, however, we expect China's fiscal system will remain stable. The provincial governments, or tier-one governments, will maintain their special status at the top of LRG hierarchy. Meanwhile, tier-two LRGs, which are mostly cities in provinces or districts in special municipalities, will likely somewhat offset their high debt burden through revenue growth and LRGs' gradual delineation in supporting the repayment of local SOEs' debts. That's according to three institutional framework assessments we published today, on three tiers of local governments. China Provincial-Level Governments' Capital-Light Framework Supports Fiscal Positions China's Push
