Local government debt show signs of improving

China's growth in local government debt has been slowing since the middle of last year, the National Audit Office said, but cautioned that some provinces were deferring the problem by repaying old debts with new loans.

In his annual report to the national legislature yesterday, Auditor General Liu Jiayi also noted that audits of 38 ministries and 389 subordinate agencies showed that extravagance and corruption persisted in some departments and state enterprises despite President Xi Jinping's nationwide crackdown on graft. Together, their audited expenses accounted for 154 billion yuan (HK$194 billion) of public spending.

Audits of nine provincial and nine municipal governments showed debts grew by an average of 3.8 per cent from the end of last June to the end of March. This was seven percentage points below the average rate for the first half of 2013. However, almost 58 billion yuan of expired debt was repaid by funds from new loans.

Official spending on meetings, trips abroad and transport dropped 23 per cent from the previous year following the crackdown on official waste.

Despite this, several departments were caught red-handed apparently exploiting the system. In one case, officials from the State Oceanic Administration extended and a 11-day trip to the Antarctic by two days, without authorisation. The trip, a site visit to researchers at southern polar bases, was found to include six days in Chile and France.

In another tour to study shale gas exploration in North America, auditors found the China Geological Survey delegation had changed the itinerary to include a three-day stay in Las Vegas.