China's local government debt could continue to surge if the government sets a growth target above 6.5 percent in the next five years, a leading global ratings agency said on Tuesday.

The comments by Standard & Poor's Ratings Services came close on the heels of the Fifth Plenum drawing up the growth target during the 13th Five-Year Plan (2016-20). Though the specific growth target has not yet been disclosed, analysts expect it to be a minimum 6.5 percent growth during the period to attain the goal of doubling GDP during 2010-20.

That is significantly higher than S&P's prediction: Under its baseline scenario, China's potential GDP growth in 2016 and 2017 is 6.3 percent and 6.1 percent, respectively; the downside scenario even suggested growth rate could dip to 5.3 and 5.1 percent in 2016 and 2017, respectively.