In its bid to bolster the economy, China intends to expand the areas where special purpose bonds are invested this year, while spending on education and in support of people’s livelihoods will remain strong.
National Audit Office found that 10 Chinese cities or counties had misused 13.7 billion yuan (US$2 billion) of special purpose bond proceeds for corporate operations and payroll.
China’s local governments are increasingly using special-purpose bond revenue to boost their local economies, but debt-fuelled infrastructure spending comes at a price.