Following rising concern over local government debt, China floated a four-grade emergency plan Monday that could mean "fiscal re-balancing."

With Grade I being the most serious, classification involves the nature and impact of any incident, according to the State Council announcement.

The city and county governments will fiscally re-balance if their annual interest payment on general debt is 10 percent higher than its public spending budget, or if interest on special debts is 10 percent more than its government fund budget.

The central government will not become involved in bailouts and local government officials involved in graded incidents will be held accountable.