الرئيسية
Chinese Premier Wen Jiabao said government debt
was "overall safe and controllable" and key projects would continue to
receive funding to avoid "systemic risks", state media said on Monday.
An explosion in lending in recent years has fuelled concerns that local governments,
which borrowed heavily to build roads, bridges and luxury apartment
buildings, will default as the world's second largest economy slows.
China's audit office said earlier this month that it had uncovered 530.9 billion yuan ($84 billion) in misused funds involving local government debts.
That compares with an estimated 10.7 trillion yuan in local government
debt at the end of 2010 -- or about one quarter of China's 2010 gross
domestic product -- but analysts believe the real figure could be much
higher.
"Currently our government debt
is overall safe and controllable," Wen told a government financial work
conference earlier this month, according to the People's Daily, the
mouthpiece of the ruling Communist Party.
"We are taking the issue of managing local government debt very seriously. Through clean-ups and regulation, the trend of expanding investment vehicles has been effectively contained."
Local governments,
which are not allowed to borrow directly from banks, have set up
thousands of investment vehicles to finance infrastructure and other
projects.
But there are concerns that Beijing's efforts to contain
inflation and property prices by restricting lending and hiking
interest rates could trigger widespread defaults and destabilise the
economic giant.
Policymakers have started to ease lending
restrictions but have indicated they will move slowly to open the credit
valves to avoid reigniting inflation, which hit a more than three year
high of 6.5 percent last July.
was "overall safe and controllable" and key projects would continue to
receive funding to avoid "systemic risks", state media said on Monday.
An explosion in lending in recent years has fuelled concerns that local governments,
which borrowed heavily to build roads, bridges and luxury apartment
buildings, will default as the world's second largest economy slows.
China's audit office said earlier this month that it had uncovered 530.9 billion yuan ($84 billion) in misused funds involving local government debts.
That compares with an estimated 10.7 trillion yuan in local government
debt at the end of 2010 -- or about one quarter of China's 2010 gross
domestic product -- but analysts believe the real figure could be much
higher.
"Currently our government debt
is overall safe and controllable," Wen told a government financial work
conference earlier this month, according to the People's Daily, the
mouthpiece of the ruling Communist Party.
"We are taking the issue of managing local government debt very seriously. Through clean-ups and regulation, the trend of expanding investment vehicles has been effectively contained."
Local governments,
which are not allowed to borrow directly from banks, have set up
thousands of investment vehicles to finance infrastructure and other
projects.
But there are concerns that Beijing's efforts to contain
inflation and property prices by restricting lending and hiking
interest rates could trigger widespread defaults and destabilise the
economic giant.
Policymakers have started to ease lending
restrictions but have indicated they will move slowly to open the credit
valves to avoid reigniting inflation, which hit a more than three year
high of 6.5 percent last July.