State planner says China has 'about 200b yuan of unspent fiscal funds'
Xu Kunlin, official from National Development and Reform Commission, criticises accuracy of a report saying Beijing seized up to 1 trillion yuan in unused budget allocations
China has about 200 billion yuan (US$31.41 billion) of unspent fiscal funds, says an official from the state planner.
Xu Kunlin, head of the National Development and Reform Commission’s (NDRC) Fixed-Asset Investment Bureau, also denied the accuracy of a report on Monday claiming that authorities have seized up to 1 trillion yuan in unused budget allocations.
READ MORE: Beijing takes back up to 1tr yuan in unspent funds from local governments, sources say
He made his comments during a briefing on Wednesday in Beijing.
On Monday Reuters reported that Chinese authorities had seized up to 1 trillion yuan from local governments that failed to spend their budget allocations, citing anonymous sources close to Chinese government.
Last weekend the mainland newspaper, The Economic Observer, reported that the unspent funds uncovered by government auditors at ministries and local governments totalled 107.9 billion yuan, based on various official audit reports released during the past three months.
The Ministry of Finance said in late July that the total amount of unspent funds by central and local governments recaptured by the treasury stood at about 250 billion yuan.
Meanwhile, the NDRC on Wednesday also told Chinese companies with good credit to issue bonds in cheaper offshore markets to support domestic investment and major national projects.
READ MORE: China's Silk Road dream falls into place with US$40b fund
It said on Wednesday the offshore borrowing should support initiatives such as the “One Belt, One Road” undertaking, the unified Beijing-Tianjin-Hebei region, and the Yangtze River belt project.
'One Belt, One Road' is a development strategy launched by Beijing in 2013 after President Xi Jinping called for a revival of the 2,000-year-old land-based Silk Road and a maritime silk route.
The New Silk Road economic belt will link China with Europe through central and western Asia, and the 21st-century maritime Silk Road, will build roads, railways, ports, airports and railways across Central and South Asia to link China with Southeast Asian countries, Africa and Europe.
The NDRC also encouraged companies to take out commercial loans. Both bonds and loans should be of one year duration or longer, and could be denominated in either yuan or foreign currency.
It also said that the current foreign debt issuance approval process would be cancelled.
Instead, companies need only apply to participate in a new registration system in advance and then report new issuances or borrowing to the NDRC within 10 working days.
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However, the NDRC would continue to set an overall annual limit for overseas debt financing, it said in a statement.
Even after five interest rate cuts in the past year, Chinese investment grade onshore corporate bond yields are generally significantly higher than those in the major markets covered by the Organisation for Economic Co-operation and Development.
With urban fixed asset investment growth sliding in August to a near 15-year low, Chinese policymakers are searching for ways to shore up growth.
Widening access to foreign debt markets could help some companies secure cheaper credit, but may not have much impact at a time when companies are nervously eyeing the potential for further falls in China’s yuan.
Additional reporting by Staff Reporter
