China Sets Tighter Scrutiny for Use of T-Bond Funds

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Last updated at: (Beijing Time) Tuesday, April 02, 2002

China Sets Tighter Scrutiny for Use of T-Bond Funds

A ministerial task force is planning to place the capital raised from treasury bonds under strict scrutiny to tighten supervision of its utilization and management. The planned supervision and inspection are vital as many infrastructure and other projects financed with capital from treasury bonds since 1998 will soon be finished.

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A ministerial task force is planning to place the capital raised from treasury bonds under strict scrutiny to tighten supervision of its utilization and management.

The inspection campaign was announced in a statement over the weekend in Wuhan, the capital of central China's Hubei Province, by the State Development Planning Commission (SDPC), the Ministry of Supervision and the Ministry of Finance.

Supervision vital for the use of the capital

The planned supervision and inspection are vital as many infrastructure and other projects financed with capital from treasury bonds since 1998 will soon be finished, said SDPC Vice-Minister Jiang Xinwei.

The task force will tighten supervision and management over the use of the capital, project construction and quality of engineering and severely deal with any misappropriation of these funds, so as to avoid their ineffective use and redundant construction, according to Jiang.

Government encourages individuals to report illegal activities

The Chinese government encourages individuals and organizations to report illegal activities in projects financed with capital from treasury bonds.

Another priority of the task force is to stop the embezzlement of construction funds or random levies made upon them, Jiang said.

China has resorted to a pro-active fiscal policy as its main tool of macroeconomic management since 1998 and treasury bonds have played an important role in promoting economic and social development.

A total of 150 billion yuan (18 billion U.S. dollars) worth of long-term treasury bonds was issued in 2001, bringing the total in bond issues from 1998 through 2001 to 510 billion yuan (61.4 billion U.S. dollars).

Projects Funded by T-Bond Issuance See Good Returns

China has achieved marked benefits by channeling the T-bond proceeds issued in recent years into a number of major projects, and there will be no problem for the central government to repay the debt, a senior Chinese official said Wednesday.

The Chinese government has issued 510 billion yuan of T-bonds since China adopted proactive fiscal policy in 1998, and is expecting to issue another 150 billion yuan worth of T-bond this year, said Zeng Peiyan, minister in charge of the State Development Planning Commission at a press conference. in detail

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