Chinese local government officials face penalties over debt

PUBLISHED : Tuesday, 10 December, 2013, 5:15am
UPDATED : Tuesday, 10 December, 2013, 6:34am

The party's organisation department has issued a circular threatening to punish local officials who raise public debt for useless infrastructure and development projects simply to garner political credit points for their own promotions.

The circular, announced by Xinhua yesterday, also vows to change the assessment system for local cadres to include indicators such as the level of local debt and environmental degradation, in addition to gross domestic product growth.

"The assessment of local debt should be strengthened and the amount of government debt should become an important indicator for evaluation [of local leaders]," Xinhua said, adding officials who raised debt blindly for white elephant projects would be held responsible.

"[The organisation department] will keep a record of those who cause wasteful use of natural resources, create a serious impact on the ecology and leave behind bad debt [to their successors] because they borrow blindly," Xinhua said.

The circular came as the party vowed at its third plenum to deal with local debt. Many local governments face problems because they cannot pay money they borrowed for infrastructure projects.