China Said to Ask Local Governments to Re-Examine Reported Debt

China’s finance ministry asked local governments to re-examine the amount of debt they reported previously as authorities step up efforts to limit leverage and control risks to the financial system.

Some local governments inflated the amount of their debt, so all the data needs to be checked again, two people familiar with the matter said today, asking not to be identified because the details are private. The local governments should examine whether they have included any debt they don’t have to repay, and they should also make sure any debt they may incur is excluded so as the figures aren’t artificially inflated, the people said.