China focuses on management of local government debt

As the European Union meets again this week to discuss how best to tackle its debt crisis, China too is focusing on its own debt management.

This week Beijing scrapped plans to allow local authorities to issue bonds directly, concerned that smaller regional governments will not be able to regulate their growing mountain of debt.

In 2010 China's local governments had debts totalling more than $1.5 trillion (£960bn), nearly 30% of which is due by next year.

But Charles Chaw from China Knowledge Investments says Chinese trade is still strong and there is no cause of concern.