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National Audit Office Launched a comprehensive Investigation On Whereabouts of Stimulus Money

Sep. 15, 2009 10:55 PM ETCAF, PGJ, FXI
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National Audit Office of the People Republic of China launched a special comprehensive investigation on the whereabouts of CNY 4trillion stimulus money this week. The previous investigation on major commercial banks was inconclusive. This round investigation will keep its focus on the bank loans. However, it will expand into the broader sectors, such as financial services, investment banking, industrial sector and real estate.
Under the regular financial audit, the investigation will be conducted under the guideline of “Special Project in Conjecture to the Central Policy of Expanding Domestic Demand”. 50-60 special task forces will be deployed to determine whether or not the bank loans indeed flow into the policy-restricted areas, such as stock and property market.
In addition, the Audit Office wants to keep track on the fund flows of the special projects granted by the governments, such as environment protection projects, to ensure their proper usage. The Audit office also wanted to investigate the redundancy of many projects, especially initiated in the rural areas.
As stated by one of brokerage house I summarized in “What next? The outlooks of 8 brokerage houses on the post-3000 Chinese Market”, the investigation might cause the money outflow from the stock market. It will add the uncertainty and volatility in the market in the short term.


source: www.cnstock.com

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