Business / Economy

Audit office set to check on progress of local projects

By ZHENG YANGPENG (China Daily) Updated: 2015-06-13 11:14

The central government has underlined its determination to get tough on State-owned infrastructure planning departments by recruiting the National Audit Office to monitor the progress of major local-level projects.

Citing sources within the NAO, the Xinhua-affiliated Economic Information Daily reported on Friday that Beijing had ordered the office to carry out progress checks every quarter.

Previously known for its traditional role of auditing the finances of local governments and State-owned enterprises and spotting potential power abuse by officials, the NAO's first week-long project audit was completed in April and a second is expected to be held imminently.

Code-named "policy audit", to separate it from the office's usual finance functions, the new checking program will cover various levels of local administration and SOEs.

The office started a similar process back in August targeting project progress within 27 ministries, China Railway Corp and 18 regional governments, all of which were later criticized as achieving slow progress or poor levels of implementation. The check changed to a quarterly basis this year.

"The fact the NAO has been mobilized by the State Council to conduct the audits underlines the cabinet's increasing worry over the economic downward pressure, and its determination to stabilize growth through major investments in critical areas," a source at State Grid Corp was cited by the newspaper as saying.

The State Grid has already invested 439.6 billion yuan ($70.9 billion) in ultra-high voltage transmission network construction and other facilities this year, which is 8.7 percent more than last year at this stage, the newspaper said. The company was included in the NAO's audit.

Other key areas of investment targeted by the NAO include water conservation, railway and urban infrastructure, and the renovation of shanty towns.

China's fixed-asset investment growth in the first five months hit a 15-year low of 11.4 percent, according to the National Bureau of Statistics.

Fiscal expenditure, still the major source of national infrastructure funding, grew just 2.6 percent in May compared to last year, a fall from the 33.2 percent expansion in April.

Government deposits in the banking system increased 385.2 billion yuan by the end of May, according to the People's Bank of China, suggesting the pace of government spending has not yet caught up.

"The authorities' determination to boost growth is unwavering," said Wang Tao, chief economist in China with UBS AG.

On Wednesday, the National Development and Reform Commission approved seven new infrastructure projects worth 120 billion yuan, which analysts also read as a clear sign that the country's top economic planner is to pick up the pace of investment.

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