China's Massive Local Debts Stir Concerns

Municipalities within the country owe and estimated $3 trillion

Calls for China to accelerate financial reforms grew louder on Monday after figures showed its indebted local governments owe nearly $3 trillion in a debt build-up that some analysts called alarming.

The National Audit Office, China's state auditor, said in a report local governments had total outstanding debt of 17.9 trillion yuan at the end of June, a sum that includes contingent liabilities and debt guarantees.

The debt load is in the middle of market forecasts and leaves China with total government debt of around 58 percent of gross domestic product.