BEIJING, July 4 (Reuters) - Some projects in China's massive stimulus plan are wasteful and it may prove hard for investors involved to pay back bank loans, China's central bank chief said on Saturday.

Zhou Xiaochuan, the governor of the People's Bank of China, also said irregular financing activities by local governments, including hidden guarantees for bank loans, may bring additional risks to China's financial system.

Zhou said local governments should nonetheless be allowed to issue municipal bonds to get funds in a formal and regulated way.

'We should open the front gate and block the backdoor,' he said at a forum the Chinese Academy of Social Sciences.

(Reporting by Zhou Xin; Editing by Valerie Lee)

((xin.zhou@thomsonreuters.com; +8610 6627 1220; Reuters Messaging: xin.zhou.reuters.com@reuters.net)) Keywords: CHINA ECONOMY/

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