Xinjiang halts all government projects as crackdown on debt gets serious
China’s biggest region issues blanket infrastructure suspension as it combs through the books to check they have enough funding to ensure their completion
All government-funded investment projects have ground to a halt across a vast region of western China while the authorities review whether these will increase government debt.
The blanket suspension of government-sponsored investment projects in Xinjiang – an area bigger than France, Germany and Spain combined – is the most dramatic move by a Chinese province or region to act on calls from the top to curb borrowing.
The Xinjiang Development and Reform Commission said in a statement published last week that local authorities must “comb through” every single government-funded project started after January 2017, especially those started after July 2017, to find out whether they have enough funding to ensure completion.
Those projects that do not have enough funding to finish and are likely to need additional funding from the government should be abandoned, the statement added.
“We would rather to have a slower economic growth rate than accumulate debt and we must … ensure there is no increase in government debt,” the statement from the Xinjiang economic planning commission said.