China debt: Beijing names and shames costly local government projects in bid to curb debt
- Beijing has put the spotlight on eight wasteful local government projects as part of its ongoing campaign to reduce debt
- The State Council urged local governments to ‘strictly follow fiscal discipline’ and ‘condense’ construction spending
Beijing has named and shamed eight local government projects in four western provinces as part of its push to rein in mounting local government debt and excessive borrowing in the property sector.
The State Council, the country’s cabinet, rebuked local officials over their loose debt policies and told them to “strictly follow fiscal discipline”. It also warned it would step up scrutiny of local government infrastructure spending and projects.
“Highly indebted regions, except necessary expenditure on livelihood and government operations, must greatly condense their construction spending and raise funds to tackle debt risks,” the State Council said in a circular released on Wednesday.
“Local governments must fully consider their development stage and fiscal endurance, and strictly implement decision-making and approval processes.”
The State Council named three projects in the northwestern province of Qinghai, three in Ningxia, and one each in the southwestern provinces of Guizhou and Yunnan.