1st Ld-Writethru: Top auditor warns of soaring local gov't debts
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E-mail Xinhua, June 27, 2013
China's top auditor on Thursday warned that local governments must improve their debt management in order to handle a sharp increase in local debts.
Liu Jiayi, auditor general of the National Audit Office (NAO), gave the warning at an 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 have risen sharply, hitting 3.85 trillion yuan (626 billion U.S. dollars) by the end of last year, according to a NAO report submitted to the NPC Standing Committee.
The debts have risen by 13 percent over the past two years, Liu said, adding that about 46 percent of the accumulated debt was owed after 2011.
Four provinces and eight provincial capitals have seen their debt rise at rates greater 20 percent, with the highest rate coming in at 65 percent, he said.
Some governments have relied too much on land revenue and new borrowing to repay old debts, he said.
About 45.4 billion yuan in new debt was created for the purpose of repaying old debt incurred by building highways, Liu said.
He also pointed to unstandardized debt management and the incomplete cleanup of debt financing platforms.
Some local governments violated regulations to provide guarantees for debts totaling nearly 81.8 billion yuan between 2011 and 2012. About 37.8 billion yuan was used for purposes other than their original intended purposes, while another 27.2 billion yuan was left unused for more than two years, Liu said.
Some local governments are figuring out how to improve their debt management systems, he added. Endi
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