(Yicai Global) March 7 -- China will prevent any rise in debt ratio, said its finance minister, signaling continuation of expansionary fiscal policy. The finance minister of the world's second-largest economy made far-reaching statements about the country's budget policy to dispel concerns among market observers following Beijing's decision to cut annual budget deficit target.

China's government debt stood at CNY29.95 trillion (USD4.73 trillion), or 36.3 percent of the gross domestic product, last year, which is well below the 60 percent international warning mark, news site The Paper quoted Finance Minister Xiao Jie as saying.

The central government debt amounted to CNY13.48 trillion, while the local government debt reached CNY16.47 trillion, Xiao said, adding, "In the next few years, China's debt ratio index will not change significantly compared to that of 2017."

Issuing local government bonds is the only legal form for local governments to borrow funds, China's finance minister suggested. In the next step, the ministry of finance will consider increasing the scale of debt reasonably, strictly implementing the budget law and the guarantee law, and rectify practices such as improper use of debt, and standardize and strengthen local debt management, he added.

China has limited the outstanding local government debt to a maximum of CNY21 trillion this year, shows the annual budget report, as local state-owned enterprises debt levels concerns policymakers. Local government officials will be held responsible for activities that may lead to increased debts, warned Xiao.