China Airs Concerns Over Debt in Regions

Signs mounted Monday of Chinese authorities' concern about the risk from debt incurred by local governments in projects to help China's economy recover—an issue that is a hot topic at the National People's Congress, now meeting in Beijing, The Wall Street Journal reported. China's leaders have increased scrutiny of this debt over the past months, fearing that local governments won't be able to pay back all their loans. The issue was also highlighted in the Ministry of Finance's budget report released at the start of the annual legislative session on Friday. The added spotlight on officials at the meeting has prompted regulators from several agencies to discuss the issue publicly. The China banking regulator's Shanghai branch said Monday that it is requiring banks in the city to reassess loans extended to local governments. An official who heads a municipal government's investment arm says local governments were instructed late last year by the Ministry of Finance to stop offering loan guarantees for their investment arms. Read more. (Subscription required.)