China’s top auditor says US$45b of construction projects face delays
Major Chinese construction projects worth about 286.9 billion yuan (US$45.17 billion) are facing delays because of problems such as the slow distribution of funds by local governments, the country’s top auditor said on Thursday.
Its comments are likely to fan concerns over the effectiveness of China’s renewed effort to pump cash into infrastructure to shore up its slowing economy, as it suggests that such investment is taking longer to ripple through.
The projects range from railways to housing.
Of 815 projects inspected across 29 provinces in August, 193, worth 286.9 billion yuan, were found to be experiencing significant implementation lags owing to a lack of funds or poor initial planning, the National Audit Office said in a report published on its website.
Of 333 railway projects currently under construction, 99 were found to have a completion rate of investment – a measure of investment efficiency – of below 50 per cent, while 20 had a completion rate of less than 10 per cent.
For instance, two railways running between the cities of Dali, Ruili and Baoshan in southwestern province of Yunnan, had their completion dates pushed from May 2014 to 2019 because of the slow distribution of construction funds, the report said.
Similar delays were found in the construction of agricultural water-conservation projects and expressways, while major telecom operators were found to be behind schedule on data centre completions, it said.
While the provinces are supposed to invest 12.43 billion yuan into major agricultural water-saving projects this year, only 708 million yuan had so far been invested at the end of July, it added.
Beijing plans to channel funds mainly into infrastructure projects to meet this year’s 7 per cent economic growth target, sources involved in policy discussions said last month.
Some economists believe current growth levels are already much weaker than official data suggest.
China’s top planning agency, the National Development and Reform Commission, has approved about 800 billion yuan of railway, port and highway projects so far this year.