It is necessary to face up to the problem of local government debt that has been covered up for too long, said an article in the Southern Metropolis Daily (excerpts below).

It is estimated that local government debt ranges from 15 trillion yuan ($2.38 trillion) to 20 trillion yuan.

To maintain economic growth and secure more revenue from land sales, local governments continue to borrow money from the banks to accelerate urbanization and expand infrastructure.

The profits from their investment in urbanization are too low to pay their old and new debts.

In Chinese law, there is no such thing as government bankruptcy. Local governments borrow from State-owned banks. All debts have been paid by the central government, so far.

It is necessary for the auditing authority to verify the extent of local government debts.

To disarm the ticking time bomb, the central government must give local governments more tax revenue proportional to their duties and establish a system under which local governments are liable to pay back all their debt.