China's chief economic planner yesterday dismissed allegations that part of the mainland's massive stimulus funds had been used to speculate in the country's red-hot property market. It was the central government's strongest defence yet of its management of the huge pile of public funds. More than a year ago, Beijing embarked on an unprecedented 4 trillion yuan (HK$4.54 trillion) spending spree to keep the economy growing amid the global downturn. Some worry part of the stimulus money has been used to invest in the property market, pushing up asset prices and raising fears of the kind of asset bubbles that sank many economies during the 1997-98 Asian financial crisis and the current global one. 'Not a cent' in the programme had entered the property market or been used for land purchases, Zhang Ping , minister in charge of the powerful National Development and Reform Commission, said on the sidelines of the annual meeting of the National People's Congress. Zhang said Beijing had invested 44 per cent of the stimulus package in livelihood projects. Property prices have surged over the past year, driven up by fast-expanding bank lending. People's Bank of China governor Zhou Xiaochuan told the parliament banks were taking risks by lending against the collateral of land since land prices might fall. He warned that banks needed to be cautious in lending to local-government investment vehicles and to guard against risks related to such investments. Mainland regulators have been expressing concern about risks associated with local-government-backed investment companies that have taken out loans during the crisis-driven credit binge of the past year. They are worried that the loans may have gone to projects that were not properly assessed for risk. Some economists have voiced growing concern lately about a surge of credit to local governments, which typically pledge land as backing. Land prices soared last year, partly due to the central bank's loose monetary policy, and critics fear a fall in land prices could expose the weakness of local-government finances and sow a new crop of bad loans. Minister of Finance Xie Xuren also warned that local governments' investment vehicles had raised too much debt. Xie urged local governments to assess their fiscal situation before expanding their financing, and said his ministry would work to regulate them. Xie said local governments were not allowed to borrow, but many had set up vehicles to obtain loans from banks and had launched projects that helped the economy recover. However, he said the fiscal situation was safe.