(Yicai Global) Sept. 1 -- China's Finance Minister Lou Jiwei said the nation's local government debt will be effectively controlled and its management system developed further.

Local government bond issues totaled CNY3.97 trillion (USD594 billion) at the end of July, of which over CNY1 trillion was issued in 2016, and bond swaps totaled CNY2.96 billion, Mr. Lou said yesterday during his report on budget implementation to the Standing Committee of the National People's Congress, the national legislature.

He affirmed that a warning and emergency response system would be developed to tighten up supervision of debts incurred by local governments and toughen probes into accountability over illegal debt guarantees.

Government data indicates that local government debt was CNY16 trillion at the end of last year. The massive debt load coupled with China's economic downturn has aroused concerns over economic stability. The finance ministry previously said government debt accounted for 39.4 percent of the national gross domestic product, well below the EU's 60 percent warning threshold and lower than in major market economies and emerging markets.