u=709660891,2509677605&fm=23&gp=0.jpg (Photo : europe.chinadaily.com.cn)
Detailed audit reports published separately for the first time by local governments in China show a total public debt amounting to U.S. $3 trillion.
China's most affluent eastern provinces posted the highest debts, according to the audit reports, with the local governments of Jiangsu, Guangdong and Sichuan heading the list. Jiangsu has the biggest debt at 1.5 trillion yuan.
Burden of debt repayment is heaviest in the more deprived provinces like Guizhou in southwestern China, which has debt ratio to GGP of 79 percent, the highest in the country.
The reports also show that most of the local governments have managed to make timely payments of most of their debts. Only a few, like Inner Mongolia, have not been up to date with their payments. Inner Mongolia has not paid 28 percent of its loans that had been due for payment.
The measure taken by the local governments to publish their audit reports is a response to the call for increased transparency.
Experts earlier this month criticized China for not publicizing sufficient data regarding its problem with local debts which is highly considered by investors as the biggest risk faced by China's economy now worth U.S. $9.4 trillion.
Local governments have availed of huge loans in past years to fund non-income generating public work projects like railways and sewage systems born of the need to support the rapid growth of the country's economy.
Although the decision to spend for infrastructure before costs increase as a result of the country's growing economy is warranted, according to some analysts, other analysts have expressed concern that quick investment has resulted in bad loans and waste.
