On December 2nd, Pan Gongsheng, the Governor of the People’s Bank of China, stated that in preventing and resolving local government debt risks, the People’s Bank of China will guide financial institutions in accordance with the principles of legal compliance and equal consultation. It will prudently resolve the risks associated with local government existing debts, strictly control new debts, establish a sound long-term mechanism for preventing debt risks, and provide emergency liquidity support to regions with relatively heavy debt burdens when necessary. It supports local governments in gradually divesting themselves of financing platform government financing functions through mergers and acquisitions restructuring, asset injection, etc., and transforming into market-oriented enterprises.