Recently, the Ministry of Finance of China introduced the local debt replacement project which is 1 trillion yuan, allowing local governments to replace some debts of high cost for local governments bonds. ANBOUND research team points out that the 1 trillion yuan local debt replacement is merely the first step. The scale of the replacement might expand further. Such a large-scale bond plan which exceeds expectation will have great impact on finance market. The regulatory authority should prepare for it in advance.