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Premier Li: Fiscal funds must not remain idle

Updated: Oct 2,2015 5:24 PM

The term “revitalizing idle assets” was first brought up during a State Council executive meeting on July 3, 2013, when Premier Li Keqiang urged to “reinvigorate and make good use of idle assets in storage”, and has since become a solid measure of the central government’s proactive fiscal policy.

However, there is still a problem of mismatched funds as allocated fiscal funds remain idle in some places while many projects crucial to people’s livelihood are in dire need of funding.

Furthermore, the pressure of an economic downturn calls for a more active fiscal policy, but traditional economic engines have slowed down, which has led to a slump in the growth of fiscal revenue.

“If the local government does not spend the allocated funds in a timely and proper manner we will take them back according to the law, and direct them to places that showed initiative and are capable of launching similar projects,” said Premier Li at a State Council executive meeting on June 10, which focused on the integrated usage of fiscal funds.

A State Council executive meeting in April discussed the overall plan for revitalizing idle assets. Then another in May further decided to push forward the securitization of credit assets through reform.

The stimulation of idle assets will not only give new impetus to fiscal policy, but also improve the economy and people’s livelihood.

This year’s government work report called for reinforced investment in public products, such as a series of projects including shantytown transformation and urban underground pipe networks.

Premier Li highlighted at the State Council executive meeting on June 10 that the central government cannot starve such projects from funding while fiscal funds sit idle elsewhere.

At the end of 2014, the State Council issued a document on revitalizing idle fiscal assets, which elevated the measure from the fiscal level to the government level for the first time. Later, the policy was outlined in more detail.

In June, the State Council released a comprehensive plan for the use of fiscal funds, with ten major rules including prescriptions on the use of funds in big projects.

Some initial battles have been won as fiscal departments of all levels have recovered 250 billion yuan ($39.3 billion) in unspent funds, according to a State Council executive meeting on July 8.