Chinese banks rapidly expanded credit in the market after the global financial crisis to boost growth
China has ordered a nationwide audit of all government debt, underlining fears that the recent slowdown in its economy may impact the financial sector.
Local governments in China borrowed heavily after the global financial crisis to try to sustain growth rates.
The last audit, published in 2011, showed they had debt of 10.7tn yuan ($1.7tn; £1.1tn) by the end of 2010.
Debt may threaten China's growth, and there are growing fears that local governments may not be able repay.
"In line with a request of the State Council, the National Audit Office (NAO) will organize auditing agencies across the country to carry out an audit of government debt," the national auditor said in a statement on its website.
The NAO said that it had halted all other projects to conduct the audit, but did not give any other details or a timeline for the audit.
Source: BBC News - Business http://www.bbc.co.uk/news/business-23486466#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa
