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China Strengthens Management of T-Bond Funds
China will tighten control over the use of money from issuing treasury bonds in order to ensure that big construction projects funded with T-bond money will be completed on schedule.
Auditor-General Li Jinhua said at a session of China's legislature Thursday that there are problems in meeting the government's schedule of completing all the major projects now under construction by the end of 2002.
In his report to the on-going 22nd session of the Standing Committee of the Ninth National People's Congress, Li said a total of 477 million yuan of T-bond money earmarked for key construction projects has been diverted by local governments.
After auditing 102 key national construction projects last year, the National Audit Office discovered that some 2.27 billion yuan of T-bond funds has sat idle because of delays in the progress of construction projects. The local governments in some areas also failed to commit their due share of money to the projects to match the central investment.
The National Audit Office also found that the invitation of bids for some of the major construction projects violated government regulations, thus incurring risks of quality control.
The National Audit Office has already taken measures to address these problems. For example, it has already retrieved 2.85 billion yuan of T-bond money that had been diverted in previous fiscal years.
The Chinese government has adopted a proactive fiscal policy in recent years in a bid to stimulate domestic demand and maintain stable growth of the economy. It has issued a large amount of treasure bonds to fund infrastructure construction and the technological upgrading of state-owned enterprises.
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