China should remain alert to mounting local government debt which without appropriate control could cause a sweeping economic crisis, Xin Benjian, an economist from Renmin University of China said yesterday.

China should tighten its control on gauging the credit of local governments, and launch a punishment mechanism when they fail in repaying debts, Xin said.

The complexity of the local government debt is very similar to Japan`s real estate bubble from 1985 to 1996 and its destiny is closely related to domestic housing and stock markets, said Xin, who is a researcher at the Chongyang Institute for Financial Studies at the university and an editor in chief at the People`s Daily.

Due to the surplus in the Chinese real estate market, the debt leverage rate grew 70 percent from 2009 to 2013, about 30 percent higher than Japan`s non-financial leverage rate when it was in its economic bubble during the last century.

By 2013, a single urban resident in China, a developing country, owned a 35-square-meter living space on average, a standard equal to countries at a middle stage of development, according to the World Bank.

Besides, with the United States showing signs of retreating from quantitative easing, China has to prepare for a massive outflow of foreign capital, which will probably affect the domestic stock market and consequently have an impact on local economies.（来源：中国网 欢迎关注人大重阳新浪微博：@人大重阳 ，微信公众号：rdcy2013)