According to a senior Chinese Ministry of Finance official, local governments have the financial resources and negotiating power to clean up their 10.7 trillion yuan ($1.7 trillion) debt pile without the need for Beijing's intervention, says an article on reuters.com. Excerpts:

Many investors see intervention from the central government as necessary to resolve what they consider a key risk to China's financial health, but this is unlikely to be forthcoming.

"Local governments have the ability (to pay their debts), especially provincial-level governments. They have financial resources, they can negotiate with banks," Jia Kang, chief researcher at the Ministry of Finance, told reporters on the sidelines of China's annual meeting of parliament.

Although Jia does not have the last say on the way China tackles its bad loans, his remarks offer an insight into how Beijing views the debt morass.

A 2012 economic blueprint presented to the National People's Congress by Premier Wen Jiabao also suggested that Beijing was not about to extend aid to local governments.

"We will continue to deal with outstanding debts by properly classifying them and managing them accordingly," Wen said.