Moody's Investors warns on local government debt

A report on local government liabilities shows a lack of transparency over debt levels, Moody's Investors Service said on Thursday. China's National Audit Office released a report last week on the debt of 36 local governments and their financing vehicles. "The NAO report highlighted increases in less transparent forms of borrowing and questions about local government debt repayment capabilities," said Debra Roane, vice-president and senior credit officer at Moody's, in an email. The report shows that for the 36 entities (15 provinces, three municipalities, 15 cities and three districts) the debt of local government financing vehicles and other entities associated with local government grew by a net 13 percent, or 440 billion yuan ($71.2 billion), from 2010 to 2012.

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