A file photo of Chinese currency Renminbi. [Photo: Baidu.com]

Latest official figures show China's government debt to GDP ratio was standing at 41.5-percent by the end of last year.

This is below the European Union's warning line of 60 percent, and also those of Japan and the United States.

Meanwhile, local government debt is sitting at about 89.2 percent, again below the international warning threshold.

Recent research from HSBC has warned that China's debt levels are reaching a critical threshold, posing a risk to the country's financial system.

However, China's Ministry of Finance says the situation is still under control and there is even room for more government debt.

However, the authority also admits local government' payment ability is decreasing, and at the same time, regional debt risks are rising due to illegal debt or improper public-private-partnership practices.

The authority says China will continue with local government debt quotas, budget management, risk warnings, emergency mechanism and debt swaps in efforts to reduce risks.