CHINA'S RISKS
Apart from external risks, China is now threatened by a growing scale of local government debt.
"China's local government debt, which expands in the form of shadow banking, is a negative, alarming phenomenon," said Hu Shuli, editor-in-chief of Chinese business publication Caixin.
Hu said that China's shadow banking, although lacking the chain of asset securitization of its foreign counterparts, is still susceptible to potential crisis.
To rein in swelling local government debts, Hu suggested, a third-party independent institution be introduced to assess local governments' capacity to service debts. Media should also be encouraged to supervise local debt problems, she said.
Former finance minister Xiang Huaicheng, however, denied that China's government debt has risen to a grave and critical level.
China's debt-to-GDP ratio is not very high, and most of the debts are internal, said Xiang, stressing that the country insisted on being "sustainable" over debt problems.
According to official data, the sum of debts of both the country's central government and local governments amounted to over 30 trillion yuan (about 4.8 trillion U.S. dollars) in 2011, and added another couple of trillions in 2012, Xiang said. He admitted the actual figure for local government debt may be higher than published statistics.
But Xiang agreed that administrative measures should be taken in preventing local governments from paying debts for lower-level governments and local companies in a blind way.
The former minister added that some credit provided by policy banks is of a similar nature to government debt, and the sum is "not very small."
Life aboard a fishing boat under bridge in city of Chongqing
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