The debt of local government-backed investment units (LGBIU) would not deteriorate, as if China could keep the economy not to decelerate, Li Yang, deputy president of the Chinese Academy of Social Sciences and former policy adviser to the central bank said yesterday in Beijing.



Even if the country`s economy appears something bad, China still has money to resolve such problem, Li Yang added.



Some media reported before that China's top banks are expected to receive a short-term boost from a plan to have Beijing write off local government debt. China's regulators plan to shift 2-3 trillion yuan of local government debt, Reuters reported on Tuesday, reducing the risk of a wave of defaults that would threaten the stability of the world's second-biggest economy.



Li Yang said" it is hard to say we should do that at this moment." The key to deal with the local government debt is to stabilize the economy cycle and prevent economy of China from a radical fluctuation.