BEIJING, June 23 (Xinhua) -- China's top auditor said Wednesday that the country's local governments had run up bank loans totaling almost 3 trillion yuan by the end of last year, most of it to fund infrastructure construction.
Liu Jiayi, head of the National Audit Office (NAO), said that 18 provincial, 16 city and 36 county-level governments audited had accumulated debts of 2.79 trillion yuan (410.3 billion U.S. dollars).
Loans totaling 1.04 trillion yuan were secured from banks and financing platform companies last year, and the other 1.75 trillion yuan dated from previous loans, said Liu in his report to the 15th session of the Standing Committee of the 11th National People's Congress (NPC), China's top legislature.
According to China's law on government spending, it is illegal for local governments at all levels to have deficit accounts, and local governments should clear their loans within the fiscal year.
It is the first time China's central authorities have released details of local government debts since potential risks from the chaotic local government financing activities become a serious concern.
The report said only 8.92 percent of new debts in 2009 were invested in the central government's 4-trillion-yuan stimulus package projects.
A considerable proportion of last year's loans were used to finance transport and other infrastructure facilities that were started before 2008, it said.