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.

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.