Austerity in West, while China can't spend cash fast enough
Published 24/11/2011 | 05:00
While governments in the West fret about their dire finances, Chinese bureaucrats are facing the opposite problem: how to spend as much as 4.5 trillion yuan (€530bn) before January.
With China's financial year ending on December 31, officials have just over six weeks to use up their spare cash. If they do not, they face having their budgets for next year cut.
One area where officials have found use for their surplus funds is on marathon rounds of banquets and drinking sessions. Inside office hours, there is the challenge of inflating the cost of everything from computers to travel expenses, with reports suggesting that government departments are paying three or four times the going rate for their purchases.
"You get criticised, not praised, for saving money," said Ye Qing, the deputy head of the Hubei provincial statistics bureau. "We do not allow budgets to roll over to the next year, so there is only a little time to spend."
With tax revenues growing rapidly, the challenge to spend it all only increases each year.
Lu Guanglin, an official on Guangzhou's metro system, said he was blamed for spending parsimoniously. "They wanted me to be more extravagant. They said if I was not spending money, I was an idiot," he said.
At the Huayang Audi dealership in the city of Changchun, a salesman said November and December usually saw a 30pc rise in sales of black saloons, the favoured vehicle of Communist party cadres.
This year, the ministry of finance estimates that 3.5 trillion yuan (€413bn) will be spent this month and next, almost a third of China's public spending budget. Stephen Green, an economist at Standard Chartered in Hong Kong, believes the sum could reach 4 trillion to 4.5 trillion yuan (€472bn to €530bn) for the final three months of the year. (© Daily Telegraph, London)