True size of local debt

The government's decision to launch a nationwide audit of local government debt sounds the alarm that the problem can no longer be ignored.

The National Audit Office said it will halt all other projects to concentrate on the audit, which is due to begin next month.

Although the NAO did not reveal any more details, it is clear that the central leadership wants to know the extent of local government debt, which already amounted to 10.7 trillion yuan ($1.7 trillion) in 2010.