China’s top government auditor pledged today to watch levels of debt and spending closely to ensure the country’s fiscal stability.
“We will look at fiscal sustainability, especially local government risk prevention and control,” Liu Jiayi, head of the National Audit Office, said in a speech posted to the agency’s website. The office will also audit all officials in “key regions, departments, agencies” at least once during their terms and conduct checks of government spending on conferences, meetings and office buildings, he said.
China’s national auditor has spearheaded central government efforts to increase scrutiny of local officials. That’s included checks on government agencies and state-owned companies to weed out corruption and a nationwide review of local government debt ordered by Premier Li Keqiang in July as concerns mounted that rising levels of borrowing by cities and provinces could derail the economy.
The audit office will be “a defender of national interests, a protector of public funds, a watchdog of those in power and a sharp sword to cut corruption,” Liu said.
Since taking over as head of the Communist Party, Xi Jinping has led a crackdown on government corruption that’s seen investigations started against the head of China’s state-owned assets administration and a deputy public security minister. The State-owned Assets Supervision and Administration Commission this week named Zhang Yi as its new director, replacing Jiang Jiemin, who put under investigation in September for “serious disciplinary violations.”
Chief Auditor Liu told the Standing Committee of the National People’s Congress in June that the agency found 175 “serious violations of economic regulations” during its 2012 audits. Those included rent-seeking tied to administrative approvals and individuals profiting from non-public information, according to a report by the official Xinhua News Agency on Liu’s comments.
Liu also said today that auditors will track potential risks from government liabilities and whether they are being resolved. The agency has yet to release the results of its nationwide review of local government debt.
Caijing magazine reported earlier this month that local government debt may be 15 trillion yuan ($2.47 trillion) to 18 trillion yuan, based on a forecast in March by the audit office’s deputy director. An earlier review by the audit office put local debt at 10.7 trillion yuan at the end of 2010.
A document issued after a Communist Party summit in November said that debt would become one of the criteria used to rate local officials. Earlier this month a meeting of senior Chinese leaders including Xi and Li identified local government debt as a focus for economic policy makers in 2014.