THE Central Government will issue more bonds to raise funds for local governments as the nation grapples with mounting levels of local debt, a prominent economist said Tuesday.

    Speaking to reporters, Fan Gang also said that local government debt levels are still manageable, though the Central Government needs to replace its existing method of financing local investment projects.

    “There will be a bigger scale of Central Government bonds” aimed at providing funds for local governments, he said, without giving a scale or timetable.

    “The Central Government is working on this,” said Fan, who heads the National Economic Research Institute. “It should help ease the burden” of local governments.

    China’s government leaders have been warning of mounting risks from local government debt.

    The National Audit Office said late last year that debt and guarantees issued by local governments had surged 67 percent to 17.9 trillion yuan (US$2.95 trillion) as of mid-2013 compared with the end of 2010.

    Under the 2013 budget, China set aside 350 billion yuan for debt offers to be made by the Central Government on behalf of local governments.

    The Central Government, which has a near-monopoly on government bond issues, has allowed a few hand-picked provincial and municipal governments to issue bonds. (SD-Agencies)