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January 8, 2010

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Home » Business » Economy

Investment transparency lifted

China publicized draft regulations for government investment yesterday to seek public opinion, a move expected to better regulate spending and improve efficiency.

To shun extravagant government buildings or projects simply built to boost image, the draft stipulates the government should mainly use its funds on projects related to the nation's security or those that cannot pool resources efficiently only by exerting market forces, according to the State Council's Legislative Affairs Office.

Projects of "special significance" should go through expert appraisals before approval, the draft says.

"It will help the government to make decisions on investment more scientifically and democratically," said an unnamed official of the Legislative Affairs Office.

"Government investment" refers to activities of spending government capital in fixed assets in China.

Government workers, who use their power for personal gain or are negligent in duties, should be punished in accordance with administrative regulations or laws, and their illegal gains should be confiscated, the draft reads.

People responsible for project construction would be banned from being in charge of government-funded projects for three years and be punished in accordance with laws if they default the government of funds, start construction without approval, change the original design, or embezzle funds, it says.

Appraisal institutions that falsify or make inconsistent conclusions would face penalties ranging from a warning, rectification, demotion, or revocation of qualifications.

The draft also allows the government to attract investment from private sources on projects by applying policies such as transfer of loans or fiscal interest discounts.

The government launched an economic stimulus plan at the end of 2008 to combat global economic crisis, targeting to invest 4 trillion yuan (US$585.6 billion) by 2010.

People can submit suggestions on the draft by visiting or sending E-mail to before January 30.


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