Top auditor warns of soaring local govt debts
Updated: 2013-06-28 09:52
The warning by Liu Jiayi, auditor general of the National Audit Office (NAO), came at the ongoing session of the Standing Committee of the National People's Congress (NPC), China's top legislature.
Debts owed by 18 provincial-level governments and municipalities at provincial capital level have risen sharply, hitting 3.85 trillion yuan ($626 billion) by the end of last year, according to an NAO report submitted to the NPC Standing Committee.
The debts rose by 13 percent over the past two years. About 46 percent of the accumulated debt was owed after 2011, Liu said.
Four provinces and eight provincial capitals have seen their debt rise at rates above 20 percent, with the highest at 65 percent, he said.
Some governments have relied too much on land revenues and new borrowing to repay old debts, he said.
About 45.4 billion yuan in new debt was created for the purpose of old debt payment in the construction of highways in 2012, he said.