(Yicai) Nov. 8 -- Chinese lawmakers have approved a State Council bill on raising the ceiling on local government debt by CNY6 trillion (USD840 billion) to replace existing hidden debts, according to a press conference today.

Xu Hongcai, deputy head of the financial and economic affairs committee of the National People's Congress (NPC), China's top legislature, revealed the approval to the media after the Standing Committee of the 14th NPC concluded its 12th session in Beijing today.

Under the new arrangement, the debt ceiling for special local government debt will be increased to CNY35.52 trillion from CNY29.52 trillion by the end of 2024.

Also starting from 2024, China will set aside CNY800 billion from each year's new special-purpose bonds for local governments for five consecutive years, thereby providing debt relief to replace CNY4 trillion of hidden debts, according to Minister of Finance Lan Fo'an.

The new measures will add a combined CNY10 trillion to China's debt relief resources, Lan told the press conference.

Meanwhile, the CNY2 trillion of hidden debts resulting from housing improvement projects in run-down areas due by 2029 and beyond will be paid in accordance with the original contracts.

As a result, the amount of hidden debts that China's local governments need to deal with by 2028 is expected to drop from CNY14.3 trillion to CNY2.3 trillion, said the minister.