Latest News:  


China's top auditor warns of economic development risks


10:47, June 28, 2013

BEIJING, June 28 (Xinhua) -- China's top auditor on Thursday warned of risks threatening economic development, calling for better management of finances and state-owned assets, as well as the sound implementation of macro-economic policies.

Liu Jiayi, auditor general of the National Audit Office (NAO), made the warning at an ongoing session of the Standing Committee of the National People's Congress (NPC), China's top legislature.


Local governments must improve their debt management, as local debts have increased sharply, Liu said.

Debts owed by 18 provincial-level governments and municipalities have risen sharply, hitting 3.85 trillion yuan (626 billion U.S. dollars) by the end of last year, according to a NAO report submitted to the NPC Standing Committee.

The debts have risen by 13 percent over the past two years, Liu said, adding that about 46 percent of the accumulated debt was owed after 2011.

Four provinces and eight provincial capitals have seen their debt rise at rates greater than 20 percent, with the highest rate coming in at 65 percent, he said.

Some governments have relied too much on land revenues and new borrowing to repay old debts, he said.

For example, about 45.4 billion yuan in new debt was created for the purpose of repaying debts incurred by the construction of highways in 2012, he said.


Audits of 53 central state-owned enterprises (SOEs) showed that their competitiveness has significantly sharpened, but management still needs improvement.

Their rate of return on equity has dropped from 10.9 percent in 2010 to the current 6.4 percent. The decrease can be attributed both to general economic difficulties and poor management systems, according to the report.

The registration of 21 enterprises did not follow the Company Law. Forty-five enterprises have too many inner tiers, with the highest reaching 11 levels, Liu said.

More than 1,780 key decisions made by the SOEs failed to meet standards, causing losses or potential losses worth 4.56 billion yuan (741 million U.S. dollars).

Some enterprises falsified sales volumes or costs to reach their quota or evade taxes, he added.

The audits also showed that some companies blindly invested in the polysilicon, wind power and coal chemical industries.

Forty-five projects were launched without approval. The total investment for these projects had reached 58.3 billion yuan by the end of 2011, Liu said.

Innovation also needs to be improved, as technological investment at 53 enterprises lagged behind their production development, he said.

Loose implementation of central policies was also found in some state-owned financial institutions.

NAO said 27 branches of state-owned financial institutions provided loans worth a combined total of 28.44 billion yuan (4.6 billion U.S. dollars) for projects without proper procedures or necessary guarantee.

Nine branches charged extra fees totaling 421 million yuan for small business loans and export credit services. Meanwhile, 18.39 billion yuan was embezzled by clients and 2.2 billion yuan was transferred to private financial markets for usurious loans, NAO said.

In addition, some energy conservation and emission reduction policies were poorly implemented and were not properly evaluated according to law.


During last year's audits, 175 cases involving serious violations of economic regulations were discovered and transferred to relevant departments. Authorities are investigating more than 630 people who allegedly committed economic crimes.

Some people were found to have engaged in rent-seeking related to administrative approvals, project construction, financial subsidies, lending and business management, Liu said.

Some people profited by using non-public information related mineral reserves, listed corporations and fund investment strategies, he said.

More than 5,000 companies or organizations were involved in illegal online banking operations, he added.

The audit office will seek to solve these problems and the State Council will report the situation to the Standing Committee of the NPC before the end of the year, Liu said.

We Recommend:

'All in Tuning All in Caravanning' Show

HK's new cruise terminal receives luxury liner

Huawei unveils thinnest smartphone in Singapore

Airbus A350 lands safely from test flight in S. France

Special coverage: China-EU solar row

Highlights of ATC Show 2013

Top 10 luxury villas of China in 2013

Turn rabbit to 'gold' - A young entrepreneur's goal

Hilton to open 120 new hotels in China

Email|Print|Comments(Editor:WangLili、Gao Yinan)

Leave your comment0 comments

  1. Name


Selections for you

  1. Special operation members in training

  2. Kevin Rudd sworn in as Australian PM

  3. People send best wishes for Mandela

  4. Dance becomes popular stress relief

  5. Kendo and its Chinese followers

  6. China focus:
    Chinese crowds

  7. Most beautiful bodies in the world

  8. Are they still beautiful without bang?

  9. Hiring index signals further job weakness

  10. China's 1st intelligent high-speed train tested

Most Popular


  1. Marriages are made in heaven not in fairs
  2. China can curb credit crunch: ADB official
  3. As house prices rise, 'wild' theories thrive
  4. PBOC's caution amid cash crunch to pay off
  5. No pains, no gains for China's economy
  6. 'Kingdom of Bicycles' rises again
  7. Positive energy needed in Sino-British relations
  8. Prism program – who are the principal victims?
  9. Stocks hold steady, but brokers still cautious

What’s happening in China

A growing thirst for water safety

  1. How to win over your Chinese colleagues
  2. Number of torture cases falls
  3. Foreign suspects accused of theft
  4. Chinese courts to have 200,000 people's jurors
  5. Father sentenced to prison for manslaughter