The total debt had soared to several billions of US dollars by June 2006, the Beijing Times reported, without specifying the exact amount.

The debts of district and township level governments accounted for nearly 70 percent of the total.

Apart from the national debt and lending of enterprises in the city, most others originated from loans from foreign governments and domestic and international financial organizations.

Most of the money that Beijing has borrowed has been used to construct infrastructure, protect the environment and spread education, the report said.

The congress, however, advised the local government departments to take strict steps to restrict the amount of debts, and proposed adopting a plan to ensure the repayment of long-term loans.

The committee suggested municipal departments conduct regular financial reviews and severely punish those misusing funds.

A committee official said the government has been asked to take full responsibility for the management of debts, including effective auditing and supervision of the use and repayment of loans.

He called for a system to be set up to identify and inform units and individuals to repay the loans on time.

Lu Jun, an associate professor with the Government Management College of Peking University, however, ruled out a debt crisis.

Lu was quoted by the Beijing Times as having said that the city's high financial revenues and income growth expected in the future, especially from the 2008 Olympic Games, would make ends meet.

(China Daily 01/16/2007 page5)

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