Chinese audit of local government debt found liabilities of $1.7 trillion at the end of 2010, Bloomberg reports. Financing vehicles established by regional authorities had over $1.23 billion in overdue debt.

Local governments, which are barred from selling bonds or borrowing directly from banks, had set up 6,576 financing vehicles by the end of last year to raise money. The audit also showed around 80% of local government debt was bank loans and 70% is due to mature in the next five years.

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