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Moody's warns China banks credit outlook may turn negative * Moody's says Beijing may ask banks to manage problem loans BEIJING (Reuters) - China's local government debt burden may be 3.5 trillion yuan ($540 billion) larger than auditors estimated, putting banks on the hook for deeper losses that could threaten their credit ratings, Moody's said on Tuesday. Addressing the estimate by China's state auditor that its local governments have chalked up 10.7 trillion yuan of debt, Moodymonster beats pro's said it found more potential loans after accounting for discrepencies in figures given by various Chinese authorities. "The potential scale of the problem loans at Chinese banks may be closer to its stress case than its base case," Moody's said in a statement. In view of that, the non-performing loan ratio for Chinese banks could be as high as 8-12 percent, compared with 5-8 percent in the base case and 10-18 percent in the stress case. Unless China comes up with a "clear master plan" to clean up its pile of local government debt, the credit outlook for Chinese monster beats probanks could turn negative, the ratings agency said. In a bid to assuage investor worries about the potential souring of its massive local government debt, different Chinese authorities including the state auditor, the bank regulator and the central bank have tried to assess the situation. But all three agencies have used different monster beats prodefinitions and accounting methods to review the debt, resulting in a hodgepodge of official forecasts. Moody's said it derived the additional 3.5 trillion yuan of debt after comparing the estimates of China's state auditor with that of the bank regulator's. The ratings agency said the Chinese state auditor likely omitted the 3.5 trillion yuan of debt from its assessment because they were not considered as real claims on local governments. "This indicates that these loans are most likely poorly documented and may pose the greatest risk of delinquency," said Yvonne Zhang, a Moody's analyst. Moody's said it expects Beijing to "implement gradual discipline" over the stock of government debt, and that would involve the Chinese government leaving banks to manage a part of the problem loans on their own. ($1 = 6.463 Chinese yuan) (Reporting by Koh Gui Qing; Additional reporting by Kim Coghill in SINGAPORE; Editing by Jacqueline Wong) ...DALVAY BY-THE-SEA, Prince Edward Island (AP) — Prince William enjoyed showing off his military helicopter training with his first-ever water landing Monday to the delight of anxious crowds in Canada, where he and his wife, Kate, have been on their first official overseas trip since their wedding. The Duke of Cambridge climbed into the cockpit of a Sea King helicopter for the military training exercise at Dalvay by-the-Sea, a scenic resort along Prince Edward Island's north shore. Prince William, a Royal Air Force rescue helicopter pilot, requested the simulated emergency landing procedure. Dressed in an olive flight suit and helmet, the prince — who is second in line to the throne — settled the large helicopter on the water several times over the course of an hour.monster beats pro From the water, William piloted several takeoffs and hovered in the air before executing dual- and single-engine landings before taxiing around as Kate watched from the ground. "He was looking for his wife on the shoreline at one point," said Col. Sam Michaud, 42, who trained William. "She was waving back about 100 feet away." Michaud said William is now fully trained. He said William remarked that the "boys back at his squadron would be absolutely jealous." Canada is the only country that trains its Sea King helicopter pilots to do a controlled landing on water if there's an emergency. The exercise William performed Monday is known as waterbirding, and if the number of times he tried it was any indication, the prince was enjoying the technique. The Sea King, which William flies back in the U.K, has the ability to land on water because of its amphibious hull. Maj. Pat MacNamara called him a star pilot. "I would suggest he was having quite a bit of fun," MacNamara said. "He said it was one of the highlights of his trip." Prince Edward Island resident Linda Patton, 60, said she was nervous watching the prince fly. "It was thrilling to watch and a little nerve-racking I must admit, especially the ones he was hovering and came straight down" Patton said. The duke will take the landing technique back home with him to use in his job, said royal press secretary Miguel Head. "The Duke of Cambridge is, first and foremost, a search-and-rescue pilot — that's his job and it's a job he's very proud to do," said Head. "When (William) took the decision to come to Canada, one of the things he actually beats pro headphonesasked to do was to do this." The royal pair then got to flex their muscles by paddling in two dragon boats to race against each other. Kate, dressed in black sportswear, got to demonstrate her athletic prowess while on the water by taking the stern of her boat. She trained as part of a dragon boat crew in 2007, and the rivalry with William appeared to be genuine. William gripped his paddle to execute a strong stroke, while Kate moved from the stern to paddle in her boat. The prince's boat won the short race by a hair and William exited the boat to give Kate a warm consolation hug. Kate playfully gave William a shove, as if to push him in the water. "There's no chivalry in sport," William jokingly told Kate as he was presented with a bottle of champagne for winning the race. "Sadly, we lost," she said, laughing, to Christine Dapart, one of the spectators in the crowd as the royal couple made their way to a pavilion where regional performers were on hand to demonstrate Celtic and Acadian dance and song. Later, the royal couple met an actress who plays the fictional star of "Anne of Green Gables," the classic Canadian novel by Lucy Maud Montgomery for which Prince Edward Island is famed. Actress Tess Benger, 23, who performs as Anne in a play, gave Kate a copy of the book. Kate, a fan of the novel and its sequels, beats pro headphonestold her she would read it again. In a tent, the couple sampled the island's food. William put his hands on his stomach and joked about eating too much on the trip. He passed on the oyster tasting, saying to Kate "this is where you take over." They tasted Island beef with sweet onion marmalade, lobster and potato chowder, pork and beef belly and strawberry shortcake. The couple later observed a search and rescue operation. The Duke and Dutchess of Cambridge, as they are officially known, were on the fifth of a nine-day trip to Canada, part of their first official overseas trip since their April 29 wedding. They were welcomed to their third Canadian province Monday with cheering, waving crowds excited to catch a glimpse of royalty at Province House. The site is the home of Prince Edward Island's legislature and of a historic meeting 146 years ago that paved the way for Canada's eventual unification and independence. On Monday morning, Kate sported a cream dress by Sarah Burton for the British fashion house of Alexander McQueen, who designed her royal wedding gown. William wore his traditional dark suit and red tie. Kate later wore dark skinny jeans and a navy-belted trenchcoat with a bright red scarf from Burton's wardrobe at Dalvay by-the-Sea. For the third time during the trip, beats pro headphonesWilliam spoke in French and English to address the crowds. "We have both so looked forward to this day, and discovering more about your beautiful island," he said. The royal pair delighted the several thousand people gathered at the site by walking over to shake hands and stop for a quick chat, while some handed them flowers, including the east coast Canadian flower, Lupins, and hand-held Canadian flags, while snapping photos. The smiling couple hopped into a landau led by Canadian Mounties to take them to Confederation Landing for another walkabout before heading to the resort at Dalvay by-the-Sea. The royal pair left Canada's smallest province late Monday afternoon. They ended the day by flying to Yellowknife, the capital of the sparsely-populated Northwest Territories, where several hundred people greeted them. They leave Canada for a three-day trip to California on July 8.