(Yicai) Jan. 27 -- Amid China's efforts to control local government debt risks, northeastern Jilin province has been removed from an official roster of 12 jurisdictions at high risk, the second region to do so after Inner Mongolia Autonomous Region.

Jilin's gross domestic product grew by 5 percent last year, and general public budget revenue increased by 13.3 percent, resulting in a continued resolution of fiscal risks and a successful exit from the central government’s high-risk debt list, Governor Hu Yuting noted in a provincial government work report released by the local authorities today.

To rein in the worrying expansion of local debt, China introduced new policies in 2024 to strictly control new investments in 12 provincial-level administrative regions that were deemed to be high-risk: Inner Mongolia, Liaoning, Jilin, Heilongjiang, Guangxi, Chongqing, Guizhou, Yunnan, Gansu, Qinghai, Ningxia, and the municipality of Tianjin.

Last August, the Inner Mongolia government disclosed that it had exited the list, becoming the first to do so. A finance official from Ningxia Hui Autonomous Region said last March that the region had met the required conditions and had submitted a formal application to the State Council for removal from the list.

After exiting the roster, the administrative restrictions on local investment and financing will be eased, which is expected to promote the recovery and development of the regional economy, Yuan Haixia, director of the research institute of China Chengxin International Credit Rating, told Yicai. 

However, leaving the list also entails a reduction in debt-relief support and preferential resources, so the move carries both upside and downside, creating a situation where opportunities and risks coexist, she added.

Local governments need to carefully weigh the pros and cons and ensure that they have the capability to manage their own debts before deciding whether to apply for removal from the list, Yuan suggested.

Jilin aims to maintain a GDP growth rate of 5 percent this year, with general public budget revenue increasing by 3.7 percent. The added value of industrial enterprises above a designated size, defined as those with annual revenue of at least CNY20 million (USD2.9 million), is expected to grow by 6 percent.

Also, total retail sales of consumer goods are projected to increase by 5 percent, according to the government work report, and fixed asset investment is expected to rise by 3 percent.

Editors: Dou Shicong, Tom Litting