To prevent debt risks from interacting with financial risks， six ministries are working together to rectify the chaos caused by local government debt. The government is sending out a clear signal： using urban construction investment bond to exploit legal loopholes is no longer possible.

However， given tightened financial regulation by the central bank， the CBRC， the CSRC， and the CIRC and the crackdown on illegal debt financing by the Ministry of Finance， will the size of local government debt， urban construction investment bond， and PPP shrink？ In addition， the issuance of local government debt was curtailed in Q1 2017， will this have a negative impact on the pace and scale of investment in infrastructure？