China to tighten capital fund management in fixed-asset investments

The State Council unveiled measures to tighten its grip on capital funds used for fixed-asset investment projects in a circular released on Nov 27.

According to the document, management of capital funds in fixed-asset investment projects should be framed by more thorough systems, which apply to corporate investment projects and operational projects backed by the government, both within China.

Improving current systems requires categorizing such projects to implement different accounting and management standards.

The ratio of capital contribution also needs to be clearly defined, depending on the nature of corresponding investment projects, the circular said.

In particular, infrastructure projects are subject to an adjustment to the minimum ratio. The proportion will be lowered from 25 percent to 20 percent for port, coastal and inland water transport projects, but remain at 25 percent for airport projects.

To further support major fixed-asset investment projects, the circular added, the State Council encourages legal and legitimate fundraising channels, calling for stringent regulations, including efforts to guard against possible risks.