China plans to further transfer 1.73 trillion yuan ($270.8 billion) of existing less-transparent local government debt into bonds by August to strengthen debt management and control potential risks, the Ministry of Finance said on Thursday after reporting financial revenue in 2017 that was higher than expected.

The country's local government debt-swap program, which started in 2015, has shifted 10.9 trillion yuan of debt into bonds trading on the public market.

"The program is expected to end by August," Wang Kebing, deputy head of the ministry's budget department, said at a news briefing.

Last year, bonds issued under the swap program totaled 2.77 trillion yuan, down by 2.11 trillion yuan from 2016, according to the Ministry of Finance.

In order to crack down on fast-growing local debt and prevent the risk of default, borrowing from local government financing vehicles－companies capitalized and owned by local governments to raise money for municipal infrastructure construction－has been forbidden since 2014 due to their high level of debt.

The financing vehicles were replaced by local government bond financing at the time.

In 2017, local governments issued 4.36 trillion in yuan bonds, 1.69 trillion yuan less than in 2016, official data show. The total local government debt balance stood at 16.47 trillion yuan by December, below the government-targeted ceiling of 18.82 trillion yuan.

The Ministry of Finance pledged to facilitate reform of local government bond financing this year, especially through insurance of the Chinese version of municipal bonds, or the so-called local government special bond, to ensure sufficient funds for key investment projects while taming illegal fun-draising activities.

Qiao Baoyun, head of the Academy of Public Finance and Public Policy at the Central University of Finance and Economics, said that issuing this new type of bond is seen as a measure to curb the country's "invisible" local debt growth, which is one of the most risky sectors.

The special bond, which is repaid by financial returns earned by investment projects instead of the government's general revenue, usually has higher coupon rates and risks, especially those invested in land purchases, toll roads and subways.

Its insurance totaled 1.996 trillion yuan in 2017, the ministry's data show.

The central government took in total fiscal revenue of 17.26 trillion yuan last year, up by 7.4 percent year-on-year, with 83.65 percent, or 14.44 trillion yuan, from tax revenue that increased by 10.7 percent from a year earlier, the ministry said.

The annual growth rate of fiscal revenue was 4.5 percent and tax revenue grew by 4.4 percent in 2016.

Lou Hong, director-general of the Finance Ministry's National Treasury Department, said on Thursday that the better-than-expected fiscal revenue was mainly supported by stable and sound economic growth in 2017, with GDP growth of 6.9 percent.

"In 2018, there are many favorable conditions to sustain sound and healthy economic growth that may strongly support an increase of fiscal revenue," Lou said.

The ministry also released that the total fiscal expenditure in 2017 was 20.33 trillion yuan, up by 7.7 percent from a year earlier, marking an annual fiscal deficit of 3.07 trillion yuan.