China vows to strictly control local governmemnt debt quotas

Record ID: 394023

  • Title: China vows to strictly control local governmemnt debt quotas
  • Date: 7th March 2017
  • Summary: BEIJING, CHINA (MARCH 7, 2017) (REUTERS) CHINA'S FINANCE MINISTER XIAO JIE STANDING AT STAGE AND WAVING TO MEDIA VARIOUS OF MEDIA (SOUNDBITE) (Mandarin) CHINESE FINANCE MINISTER, XIAO JIE, SAYING: "I believe the measures to 'open the front door and block the back door' and measures to protect and regulate will definitely be able to reasonably control outstanding local gove
  • Embargoed: 21st March 2017 04:58
  • Keywords: China debt quotas control local government
  • Location: BEIJING, CHINA
  • City: BEIJING, CHINA
  • Country: China
  • Topics: Diplomacy/Foreign Policy,Government/Politics
  • Reuters ID: LVA00166YMIBR
  • Aspect Ratio: 16:9
  • Story Text:China will strictly control local government debt quotas and step up checks on illegal debt guarantees, finance minister Xiao Jie said on Tuesday (March 7), as the country's top officials stepped up assurances that they will keep financial risks under control.
    With the economy now on more solid footing, containing the risks from years of debt-fuelled stimulus and heavy spending has been a major focus at the annual meeting of China's parliament which began on Sunday (March 5).
    "I believe the measures to 'open the front door and block the back door' and measures to protect and regulate will definitely be able to reasonably control outstanding local government debt and keep debt risks in check," said Xiao.
    He referred to "open the front door" as a measure to manage incremental local government debt and "block the back door" as a measure to manage the quota of local debt and strengthen risk management.
    The finance ministry released the 2017 budget report on Sunday (March 5) and the omission of the closely-watched defence spending projection immediately sparked questions about whether Beijing was intentionally trying to conceal the amount it spends on its rapidly modernising military.
    "With regards to whether there is a problem with transparency (in the country's budget plan), I can unequivocally tell you that the issue of non-transparency does not exist," he said.
    On Monday (March 6), the state news agency Xinhua finally released the number, quoting an unidentified Finance Ministry official saying that defence spending would rise this year by 7 percent to 1.044 trillion yuan ($151.21 billion).
    The omission of the figure from the annual budget report marked a break with years of tradition.
    Xie also said China has recovered 2.3 billion yuan ($333 million) from companies that cheated a subsidy program to promote green energy cars.
    China's central government has spent billions in subsidies to aggressively promote battery electric and plug-in hybrid cars, aiming to cut urban air pollution and encourage domestic car makers to leapfrog global competitors in automotive technology.
    "(China's Finance Ministry and other authorities) have made open announcements about the companies that cheated in the subsidies programme, and have strictly dealt with them and punished them in accordance with the law, and have recovered around 2.3 billion yuan in stolen amounts and fines from the guilty companies." he said.
    Last year, the finance ministry concluded its investigation into the cheating scandal, with dozens of companies eventually being named for wrongfully obtaining subsidies.
    Automakers, predominantly coach bus makers, were found to have used various methods to cheat the program, including fabricating production and sales entirely, selling cars to their own leasing companies and seeking subsidies for vehicles that did not meet minimum technical requirements.
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