12 Chinese provinces and cities at high risk from debts have been requested by the central government to slow down or halt construction of infrastructure projects, including transportation projects, municipal works, industrial park projects, various types of building works and transformation of shantytowns.
Meanwhile, except for livelihood projects, such as schools, hospitals, water supply, electricity and heating, no new projects should be allowed in 2024. Moreover, projects with a total investment completion rate of less than 50 percent will be slowed down or halted, while projects with an investment completion rate of more than 50 percent but with major problems will not be continued.
The 12 provinces and cities include Tianjin, Inner Mongolia, Liaoning, Jilin, Heilongjiang, Guangxi, Chongqing, Guizhou, Yunnan, Gansu, Qinghai and Ningxia, mostly located in northeastern China and western China, which have high local debt leverage ratios. At the same time, unless they get special approval from the central government, the 12 provinces and cities will not be allowed to start construction of high-speed roads, subways and light rail projects.
Furthermore, one of the first-tier cities, Shanghai, has been asked to hold off on approvals for shopping malls, office buildings, and industrial and research and development projects.