China’s local investment and development companies (“LIDCs”), also generally known as local government financing vehicles (“LGFVs”), are progressively advancing market-oriented operations against the backdrop of the central government’s enhanced oversight of local debt. Their industrial transformation directions are diversified, primarily focusing on industrial investment, resource integration, and expansion into market-oriented businesses, with varying degrees of marketization. Lianhe Ratings Global Limited (“Lianhe Global”) typically employs a “Two-Factor Assessment Mechanism” when evaluating their creditworthiness, considering both the entity’s standalone credit profile and the likelihood and extent of external support (usually from its local government shareholder). In addition, Lianhe Global believes that for strategically important entities, even with a high degree of market-oriented activities, the government may still provide support at critical junctures to maintain local economic and social stability. Therefore, the likelihood and extent of government support remain an important factor in credit assessments.