Local financial scars

China's economic growth may be piling it on, but so is the worrisome debt from local governments, enough to be a major concern for policymakers.

Though the zeal to invest from local governments has helped the country's overall economy rebound, it seems that local governments have done so with reckless abandon.

In 10 out of the country's 31 provincial regions, the total debt of local government investment agencies had reportedly exceeded local gross domestic product. There were no exact numbers on how much these finance arms of local governments were in debt to banks, but apparently the investments accounted for a very high proportion of bank lending last year.