By staff reporter Wang Changyong

(Caijing.com.cn) The Shaanxi provincial government will seek to help lower-level governments finance projects under Beijing's 4-trillion-yuan economic stimulus package by issuing local government bonds, government officials said. 

Wang Yongjie, an official with the Shaanxi finance bureau, told Caijing that the central government approved 6.54 billion yuan in stimulus spending in the province for the last quarter of 2008 and the first quarter this year. Shaanxi local governments are required to contribute 5.76 billion yuan of the funding.

The Shaanxi provincial government has been authorized by the State Council to issue 6.3 billion yuan worth of local government bonds in 2009, Quan said, adding that 84 percent of the proceeds from the debt issue will be forwarded to city and county governments.

The debt issue will allow Shaanxi to meet its funding obligations under the stimulus package for the year, the finance bureau's Wang said.

While some local governments in the northwestern province have funds readily available, others are so cash-strapped that they have had to pay public servants' salaries via transfer payment from the central government, Quan Yongsheng, vice director of the Shaanxi Development and Reform Commission told Caijing earlier this month.

The National Development and Reform Commission announced earlier that the central government will provide 29.5 percent, or 1.2 trillion yuan of the 4 trillion yuan stimulus package. The remaining 2.8 trillion yuan will come from local governments' existing funds, policy loans, local government bonds, corporate bonds, medium-term notes and bank loans.

A recent National Audit Office survey found that out of a total 335 projects backed by government stimulus funds, 94 percent of the capital that should have been provided by the central government was in place by the end of March. Local governments had allocated just 48 percent of the funds.

Shaanxi plans to invest a total 144.9 billion yuan in 171 key construction projects this year, including those backed by the stimulus plan. The projects will require total investment of 871 billion yuan by the time they are completed.

The province's planned 2009 spending is even higher than its budget income for the year, promoting the SDRC to encourage local urban construction investment firms to raise the cash via the issue of urban construction bonds, Caijing reported earlier.

Full story in Chinese: http://www.caijing.com.cn/2009-05-26/110171651.html