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China stresses supervision on reform through auditing

Updated: Aug 5,2016 2:31 PM

National Audit Office (NAO) has audited the financial performance of 1,077 units and 1,633 projects nation-wide since this April to ensure the success of supply-side structural reform.

The reform is aimed at handling major issues which hinder economic growth in China, including overcapacity, overstocking, high leverage ratio and high cost.

According to a director from the financial auditing department of NAO, the result indicates both pros and cons during the promotion of reform from financial perspective.

According to NAO, the reform has led to reduction in idle funds ratio. For example, until the end of June, 38 counties in 17 provinces, 607 million yuan of poverty relief funds have been revitalized, taking up to 72 percent of idle fund of its kind.

The result also shows related industries and departments all tend to streamline administration and delegate power, optimize service and lower systematic cost, effectively adopting new policy such as replacing business tax to value-added tax.

In the meantime, the auditing result have revealed problems. First, there is a lack of interconnectivity and interaction between upper and lower level administrative departments during the process of streamlining administration, delegating power, strengthening regulation and improving services. For example, illegal fee and overlapped charges which amounted to 201 million yuan still exist during the process of administrative procedures.

In addition, major projects are often delayed due to various reasons. For example, a sewage disposal factory in Gansu province was planned to start its expansion in April 2013, but was delayed for over two years due to insufficient fund and malfunction of the local government.

The State Council executive meeting held on July 27 has decided to strengthen the role of auditing procedures in supervising and guaranteeing the supply-side reform.

And the supervision should be emphasized on two aspects, the construction of major projects and follow-up on the overhaul process.