July 31, 2018 / 1:09 AM / 4 months ago

Rustbelt Chinese province sets up team to oversee spending: report

SHANGHAI (Reuters) - The province of Liaoning in China’s rustbelt northeast has established a parliamentary committee to scrutinize government spending and control debt, the first province to do so, local media reported.

The Beijing News said the new body, set up by the standing committee of the Liaoning People’s Congress, was part of the province’s push to tackle rising debt.

Earlier this month, the Ministry of Finance said total debt in Liaoning stood at around 845.5 billion yuan ($124 billion) at the end of last year, 168.8 billion yuan higher than the figure given by the provincial government in February, the Beijing News said on Monday.

According to a notice issued by the Liaoning People’s Congress last week, the province’s performance when it comes to controlling expenditure has not been satisfactory, and some old industrial regions have relied too much on high debt to drive growth.

It said the new body would bring spending budgets at all levels under greater scrutiny and control.

The official China Daily said in an editorial on Tuesday that the move would “set a good example” for other regions when it comes to tackling debt.

Liaoning province, which has long depended on heavy industries like steel, coal and machinery manufacturing, has sought to spend its way out of a long-term economic decline, investing huge amounts of public money on new infrastructure as part of the state’s 15-year “Rejuvenate the Northeast” program.

But it continues to struggle to overcome slowing growth as well as a rapidly ageing population. After reporting negative economic growth in 2016, Liaoning began to recover last year and its GDP rose 5.6 percent in the first half of 2018, though it still lagged the national rate.

Reporting by David Stanway

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