Beijing seizes up to 1 trillion yuan in unspent local govt budgets: sources

Beijing

ANGRY Chinese authorities have seized up to one trillion yuan (S$220.9 billion) from local governments who failed to spend their budget allocations, sources said, as Beijing seeks ways to stimulate economic growth which is at its slowest for 25 years.

The huge underspend, linked to officials' reluctance to splash out on big-ticket projects while the authorities crack down on corruption, supports the argument of some economists that Chinese state investment has grown too slowly this year.

One of the two sources, both of whom are close to the government, said: "In the past, local governments had asked for the money. Money was given, but no one acted."

They declined to be named as they are not authorised to speak to the media. "Investments were not realised, and the money will be reallocated," added the source, an economist. He did not elab…