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December 25, 2009

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Stimulus spending goes as planned

CHINA is spending its stimulus package largely according to plan and it will enhance inspection to ensure that the funds are properly used, senior officials said yesterday.

According to the original plan, the central government should spend an additional 487.5 billion yuan (US$71.4 billion) from this year's fiscal income as a stimulus to boost the economy.

With the existing regular spending, the overall amount of fiscal spending should reach 908 billion yuan.

Vice Finance Minister Zhang Shaochun said fiscal spending may exceed 908 billion yuan this year due to more funds for the construction of homes for relocated families, for cutting of greenhouse-gas emissions and for innovation.

By the end of November, the central government has spent 862.6 billion yuan, equivalent to 95 percent of the budget, Zhang said at a press conference.

"It is largely on schedule," Zhang said, noting that next year's stimulus spending remains at 588.5 billion yuan.

Meanwhile, Wang Wei, head of the inspection bureau under the General Administration of Quality Supervision, Inspection and Quarantine, said the government did not find any example of huge mismanagement of the funds, such as using them to finance highly polluted projects or in industries suffering from overcapacity.

But about 88 cases slipped through the net such as lower-level governments directly appointing a company for stimulus-related projects instead of through a public bidding or splurging on unnecessary purchases like luxurious cars.

Wang said his team will improve efforts to supervise how the funds will be used next year.

The stimulus package has helped China's economy to grow.

Its gross domestic product expanded 8.9 percent in the third quarter, cementing from the increases of 7.9 percent in the second quarter and 6.1 percent in the first three months.


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