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Update: China plans to quickly spend 200b yuan in unused govt funds: planner
[BEIJING] China plans to invest about 200 billion yuan (S$43.96 billion) in unspent fiscal funds as soon as possible, an official from the state planner said, adding it was not accurate that authorities had seized untapped local government allocations totalling one trillion yuan.
Reuters reported on Monday that angry Chinese officials had repossessed up to one trillion yuan of unused money from local governments that failed to splash out on big-ticket projects in order to lie low in an anti-graft crackdown.
When asked on Wednesday about the report, Xu Kunlin, the head of the National Development and Reform Commission's investment office, said the ne trillion yuan figure "should not be taken to be authentic""My understanding of the situation is around 200 billion yuan of leftover funds have been cleared up," Mr Xu said, without elaborating. "The focus is on re-adjusting the usage of these funds," he said, adding that the money will be reinvested as quickly as possible in several major construction projects. No details were given.
Unspent fiscal budgets are a further drag on China's economy in a year when growth is grinding toward a low not seen in a quarter of a century.
Spooked by China's biggest-ever and ongoing crackdown on corruption, many Chinese officials in the past 18 months have resorted to dithering over approving major projects to stay out of potential trouble.
That has annoyed Beijing, which has scolded procrastinating local governments for their laziness and repeatedly threatened to punish them by recalling their untouched budgets.
HSBC Bank estimated in May that China had 3.8 trillion yuan of unused fiscal funds carried over from previous years.
Mr Xu's acknowledgement that China will not let fiscal funds sit idle echoed recent comments from the government that it wants to ramp up spending to bolster a stuttering economy.
Data released last week showed the world's second-largest economy lost more steam in August despite five interest rate cuts since November, with growth in investment and factory output both missing forecasts.
Analysts said the figures reinforced arguments that China must further loosen policy to stoke its economy and increasing investment is seen by many as the best way to lift growth in the short-term.