Local governments are forced to spend quickly the money still in their coffers to avoid losing the same amount in next year’s budget allocations. This has raised concern that money will be wasted and embezzled at the expense of the population. Some ask: Why not raise wages?

Beijing (AsiaNews/Agencies) – The Chinese government is in a rush to spend two trillion yuan (US$ 300 billion) over the next three weeks because about 25 per cent of its annual budget is still unused this year. For a number of analysts, spending under such circumstances could lead to widespread misappropriation or waste of taxpayers' money, or in some instances, embezzlement of public funds.

As of last month, the Ministry of Finance put government spending at 5.62 trillion yuan, or 73.8 per cent of an annual target of 7.62 trillion yuan earmarked for this year. For He Zhenyi, a senior public finance researcher with the Chinese Academy of Social Sciences, both provincial and central government officials are likely to speed up spending the remaining 2 trillion yuan, fearing budget cuts next year if they fail to meet spending targets. This will likely create the potential for financial malpractices including building luxury office buildings, buying posh official cars, or giving away unjustified fat bonuses to staff.

Finance Minister Xie Xuren has voiced his concern over the situation by urging local governments to strengthen public funds management and take precautionary measures to avoid waste.

At the same time, a debate is now underway as to how best to spend the money. “The simplest way could be to divide two trillion yuan by 1.3 billion people to ensure every mainlander has some cash to welcome in the Year of the Tiger,” wrote Wang Xiangwei in the South China Morning Post. “Seriously, that is what the mainland authorities should have done if they really wanted to boost domestic consumption.”

Others have proposed investing the money in infrastructure. Government newspapers have suggested making tax cuts next year. No one has mentioned outing more money in healthcare or childcare. Many fear however that the money might go to military spending.

This is not the first time that the government has failed to meet its spending targets, but for Ma Guoxian, director of the Public Policy Research Centre at Shanghai University of Finance and Economics, this year's surplus is much bigger than in previous years, largely due to the central government's massive stimulus plans to spend its way out of the economic recession.

There are two reasons for slow public spending. The first has to do with the long time it takes to implement large infrastructural projects. The second stems from local governments’ concern over spending too much.

• china
• government
• spending
• waste
• embezzlement