Beijing to crack whip on projects
BEIJING has restated its determination to continue the austerity drive and has warned local authorities to strictly control spending on fixed assets.
Inspection teams have been sent to Hebei, Jiangsu, Zhejiang, Henan, Guangdong, Guangxi, Beijing and Shanghai to check the accounts of local governments and state-owned units, the semi-official China News Service reported.
Other provinces and cities were required to do 'self inspections' and report to the Government by the end of this month.
The State Council's order reiterated that only small projects covering agriculture, irrigation, environmental protection and ordinary housing were to be allowed.
The latest campaign, led by the State Planning Commission, is backed by central government agencies like the State Economic and Trade Commission, the Ministry of Finance, the People's Bank of China and the Auditing Administration. Citing figures provided by the State Planning Commission, the service reported that although the data showed a slowdown on fixed-asset investment in the first half of this year, the situation remained grim.
Beijing has blamed runaway prices on uncontrolled spending on fixed assets such as 'high-class office blocks and luxury villas' by local governments and state-owned units.
The official inflation target this year is 15 per cent.
According to the figures, state-owned units spent as much as 373.4 billion yuan (about HK$347.26 billion) on fixed assets from January to June this year - 22.2 per cent more than in the same period last year.
However, the increase was 15.3 per cent less than in the same period in 1993.
In the first six months of the year, state-owned units across China launched 21,734 new projects despite a State Council moratorium on spending.
The new projects involved 162.1 billion yuan, up 45.6 per cent from last year.
The report blamed the increase on local authorities. 'Although various provinces, regions and cities have achieved progress in controlling fixed-asset investment, serious problems remain,' it said.
'Since some localities have not conscientiously implemented the order of controlling new investment projects, there has been a rapid increase of new projects this year.' To curb spending, the inspection teams have been told to: Compile a report on the progress of fixed assets investment projects, including details such as the source of funds and composition of investments.
Check whether new projects have been approved and ascertain their current status.
Investigate whether the new projects violate the financing requirement set down by the central government, checking especially whether state funds have been misappropriated and then used in the projects.
Report on development zones and real estate projects.