From the chinese press

Local govts in loan trouble

Local governments' loan balance reportedly hit 7.2 trillion yuan in late 2009 - an increase of 3 trillion yuan. To solve the debt problem, the government should reform the official evaluation standards, says an article on Xinhua net. Excerpts:

There are three ways to solve the local governments' loan balance or debt problem. First, the central government can help local governments collect more funds by increasing taxes or issuing more currencies. But such a move could let the fear of high inflation come true.