Local govt debt, despite challenges, is controllable

China is tackling the challenges brought about by the pile-up of local government debt, but local government debt itself is a necessary financial tool to support the construction of local infrastructure.

International experience has shown that the appropriate division between central and local government's fiscal expenditure responsibilities is bound to require local government play an important role.

That is in the construction of infrastructure and the promotion of local economic development, through the optimal allocation of local government debt resources.