China plans to issue 50-billion yuan ($6 billion) worth of bonds to fund infrastructure projects, state media reported Saturday.
The Ministry of Finance is scheduled to issue the state treasury bonds in the second half of the year. The interest rates and terms have not yet been announced, the China Daily said.
The projects will be mainly in the central and western regions, which the government is pushing to develop.
Money from the bonds will also be used to finish existing projects which failed to meet their scheduled completion date at the end of last year due to funding shortfalls.
It is feared that corruption will lead to misuse of the funds, the paper said, and the State Council has been urged to strictly control which new projects receive approval and to tighten supervision and auditing of funds to prevent misuse.
The issuing of the bonds was approved by senior legislators Friday at the 17th session of the standing committee of the National People's Congress (NPC), China's parliament.
Li Peng, chairman of the NPC standing committee, said the issuing of the bonds was necessary to help maintain the momentum of growth in the Chinese economy.
The economy expanded by 8.2 percent in the first half of the year, compared with 7.1 percent for the whole of last year, with fixed asset investment — or government spending on infrastructure projects -- playing a significant part in fueling the growth.
In July, the government announced it sold three billion yuan ($360 million) worth of 10-year bonds to cover gaps in the funding of its controversial Three Gorges dam project.
Widespread corruption among officials involved in the construction led to $600 million being embezzled from the project last year, amounting to 12 percent of the entire budget to relocate 1.13 million people. — (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)
