China to start nationwide audit of government debt

China's top auditing body, the National Audit Office (NAO), announced Sunday that it will conduct a nationwide audit over government debt.

"In line with a request of the State Council, the NAO will organize auditing agencies across the country to carry out an audit of government debt," the national auditor said in a one-line statement on its website.

The office does not provide any other details, nor a timetable, for the audit.

The NAO has previously conducted two rounds of audit over local government debt.

A nationwide audit conducted in 2011 found that China's local governments' debt totaled 10.7 trillion yuan (1.73 trillion U.S. dollars) at the end of 2010.

In early June this year, the NAO said that a follow-up audit found liabilities of 3.85 trillion yuan owed by 36 local governments by the end of 2012.

The debt amount was 12.94 percent higher compared with that at the end of 2010, according to the office. Combined debt of the 36 local governments accounted for 31.79 percent of the 10.7 trillion yuan back then.

The Chinese central government has repeatedly stressed the urgent need to guard against financial risks, including the local government debt problem.

Liu Jiayi, auditor general with the NAO, warned at a session of China's top legislature in late June that local governments must improve their debt management in order to handle escalating growth in local debt.

As Sunday's statement did not specify the audit target, analysts said that all government debt, including that at central and local levels, is likely to be covered in the forthcoming audit.