China local government debt surges by 70%

China's government asked the National Audit Office (NAO) in July to do a round-up of the debts outstanding at a local level.

The report showed some local governments were using new loans to repay more than a fifth of their debt.

China has a total government debt of about 58% of its economic output.

Persistent fears over the level of non-performing bad debt have affected perceptions of the world's second-largest economy, as some worry whether the loans can be paid back.

The figure is still less than half the debt burdens in Japan - the world's third-largest economy - and Greece, but some analysts warn that China's debt cannot continue to grow at this pace forever.

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