Central Government to Directly Pay for Local Roads

The Chinese central government will directly pay for the construction of local roads in a number of provinces instead of transferring the funds to local governments.

The Ministry of Finance said that it has mapped out a plan to channel the money from the recently imposed automobile purchasing tax directly to road projects in Heilongjiang, Jiangsu, Hainan, Yunnan and Shanxi provinces and Xinjiang Uygur Autonomous Region. The measures went into effect on January 1.

Instead of allocating the money to local governments, as it did in the past, the ministry will hold the funds in local bank accounts and issue payments according to the budget and progress of the projects.

The ministry said in a press release that the move is another major step in establishing a system of direct payment from the central coffer.

It said that the move will greatly enhance the supervision and efficiency of central funds usage.

China imposed the automobile purchasing tax to replace similar fees charged by local government at the beginning of this year. In order to make up the shortage of road construction funds in some localities, the central treasury decided to transfer part of the tax revenue to local road construction projects.








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