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China's Finance Minister called for strengthened efforts to manage local government debt during a tour to Hebei province, according to a statement published by the ministry on Jan 21.
Finance Minister Xie Xuren said there was a need to step up prevention of financial risks.
He also noted the need for the gradual establishment of a financing mechanism for local governments, even though he fell short of saying that local governments should be allowed to sell bonds or taking bank loans directly.
China's local governments ramped up efforts to borrow for infrastructure projects in 2012 after a slowdown that started in 2011.
Bonds issued by local government financing vehicles totaled 636.8 billion yuan ($102.4 billion) last year, more than double the amount of 2011, the China Central Depository & Clearing Co said in an earlier report.
Official figures on local government debt stood at 10.7 trillion yuan at the end of 2010.
A report by Changjiang Securities estimated that the figure might have grown to 12 trillion yuan by the end of 2012, or 23 percent of China's GDP in 2012.
Xie's call echoed a notice previously issued by the Ministry on Dec 31, which called for limits on the irregular financing of local governments, after the banking regulator called in November for tougher regulations on infrastructure investment.
While calling for tightened management of local debt, the finance minister also urged local governments to continue implementing proactive fiscal policies, in line with central government's efforts to boost economic growth.