BEIJING - China's local government debt risks have been effectively mitigated, Minister of Finance Lan Fo'an told a press conference on Thursday.

As of Wednesday, local governments had issued bonds totaling 2.96 trillion yuan ($413 billion) aimed at replacing existing debt, said the minister.

The bonds issued last year for the replacement of 2 trillion yuan of local government debt saw an average reduction in interest rates by over 2.5 percentage points, said Lan.

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It is estimated that these bonds will reduce interest payments by over 200 billion yuan over five years, significantly easing the funding pressures and interest costs for local governments, Lan noted.