facebook
twitter
rss
account
search
search
 

China to conduct audit of government debt

July 28, 2013 at 10:56 PM   |   Comments

BEIJING, July 28 (UPI) -- The Chinese Cabinet, concerned about rising local government debt that stood at $1.73 trillion in 2010, ordered a nationwide audit by its top agency.

In a brief announcement Sunday, the National Audit Office said at the request of the Cabinet, its agencies would audit the spending by local governments, but did not say how long the process would last and did not give details.

But the issue of rising local government debt appeared serious enough as it comes up at a time when China's economy is slowing down.

The official Xinhua News Agency said an audit conducted in 2011 showed the local governments' debt totaled 10.7 trillion yuan or $1.73 trillion at the end of 2010. The report said a follow-up audit last month found 36 local governments alone had liabilities of 3.86 trillion yuan or nearly $60 billion at the end of last year.

Xinhua said the federal government has been warning about the urgent need to guard against financial risks, including local government debts.

The BBC reported while some of the local government borrowings were spent on infrastructure projects, others went to finance property construction.

"A lot of the projects that were invested in will not have the kind of returns that they had initially estimated," Dariusz Kowalczyk, senior economist with Credit Agricole-CIB in Hong Kong told the BBC. "That coupled with slowing growth means that the finances of the local governments may not look too good."

© 2013 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
Most Popular
1
Some iPhone users getting checks for liquid damage Some iPhone users getting checks for liquid damage
2
Boeing announces job relocations, business unit consolidation Boeing announces job relocations, business unit consolidation
3
Outrage over FERC decision on LNG exports Outrage over FERC decision on LNG exports
4
Coca-Cola company, other soda makers, pledge to cut calories Coca-Cola company, other soda makers, pledge to cut calories
5
Exxon says it's safe from Russian sanctions Exxon says it's safe from Russian sanctions
Trending News
x
Feedback