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In 2022, due to a global surge-up of inflation, developed economies such as the United States and Europe adopted aggressive contractionary policies, which lead to a worldwide deceleration in economic growth.Domestically, the COVID-19 pandemic exhibited scattered outbreaks and localized surge-ups, intensifying the pressure of demand contraction, supply shocks and weakening expectations on domestic economy.In response, the central government escalated the macroeconomic adjustments, with stabilizing investment as a crucial pillar to underpin the macroeconomic landscape.Targeted efforts were focused on key sectors such as the“Two New and One Heavy”industries, urban renewal, county-level urbanization, and rural revitalization.Guided by policies aimed at stabilizing investment and promoting development, LGFVs witnessed a moderated improvement in the financing environment.They accelerated the optimization and adjustment of structural layouts, promoted reforms and development centered around state-owned enterprise reform, integration and restructuring, and asset activation.Concurrently, the national stance of stringent control over local government debt persisted, contributing to weakened fiscal capabilities in certain regions.This was culminated with increasing debt repayment pressures for LGFVs, posing challenges to their fiscal resilience.As 2023 unfolds, a new phase of deepened reform follows the conclusion of the three-year state-owned enterprise reform action plan.Amidst the overarching backdrop of expediting economic recovery, LGFVs continue to shoulder their mission, focusing on pivotal domains such as investment in urban, county, and rural areas.Simultaneously, the key facets of deepening reform, reshaping business approaches, and optimizing strategic layouts receive dedicated attention, aiming at expediting a high-quality transformation and development.

Keywords: LGFVs; Debt Pressure; Investment Stabilization; State-owned Enterprise Reform; Integration and Reorganization