BEIJING - A township government in Shanghai reportedly borrowed 2 billion yuan ($293 million) in 2008 under the cover of a national high-speed railway project to repay debt, highlighting the risk of spiraling local government debts.

The Guangzhou-based 21st Century Business Herald reported the news on Wednesday, citing an audit document that was allegedly filed by the National Audit Office (NAO) in 2009 and recently obtained by the paper.

The case reveals the huge pressure placed on China's regional governments to finance their spending as China boosts its economy with a 4-trillion-yuan stimulus plan.