BEIJING, Jan. 24 (Xinhua) -- South China's Guangdong Province and Guangxi Zhuang Autonomous Region revealed their local government debt situations on Thursday, both claiming the debt risks are under control.
China's National Audit Office led an audit of local government debt in Guangdong and Guangxi from the start of August to the end of September last year. The Thursday reports marked the first official release of the country's controversial local government debt.
Guangdong's governmental bodies at provincial, municipal, county and township levels had 693.16 billion yuan (113.63 billion U.S. dollars) of outstanding debt payable to financial institutions, as of the end of June, 2013. The equivalent figure for Guangxi was 207.08 billion yuan.
As of the end of June, Guangdong's governments at the four levels also had 102.09 billion yuan to pay in the case of the debtors they underwrote failing to pay back the money. The figure for Guangxi was 123.09 billion yuan.
In addition, at that point in in time, Guangdong's governments needed to set aside another 221.29 billion yuan as potential financial aid to borrowers having difficulties in paying their debts. The figure for Guangxi was 102.76 billion yuan.
Normally, the second and third kinds of debts are supposed to be paid by borrowers themselves. Therefore, the government will not necessarily have to settle these debts itself.
On the release of the debt information, audit authorities in Guangdong and Guangxi claimed that default risks in both regions are generally under control.
The debt to be directly paid by the government in Guangdong expanded at an annual rate of 4.34 percent, which was relatively slow, over the past three years, said Lu Rongchun, vice director of the Guangdong Audit Office.
"And the size of Guangdong's government debt is appropriate given the large scale of its economy and fiscal revenue," according to Lu.
Guangdong's 2013 GDP has been estimated at 6.23 trillion yuan, with total fiscal revenue topping 1.69 trillion yuan, according to Lu.
A note on the Guangxi Audit Office's website also said the region's fast and steady economic growth can ensure the payment of government debt.
The ratio of debt to be directly paid by the government against its "comprehensive financial capacity" at the end of 2012 was 54.41 percent for Guangdong and 47.7 percent for Guangxi.
In addition, both regions said the money governments borrowed was largely used for infrastructure construction, which is profitable and puts borrowers in a good position to pay the debt.
Government debt has long been a sensitive issue in China as local authorities have pursued GDP growth often at the expense of significant borrowing.