(Yicai) Oct. 25 -- China’s budget deficit ratio is expected to increase slightly but will remain in a reasonable range, the Ministry of Finance said after the central government announced it would issue additional government bonds worth CNY1 trillion (USD136.8 billion) in the third quarter of the year.

After issuing the additional bonds, China’s budget deficit ratio will rise to 3.8 percent from 3 percent of the gross domestic product, Vice Minister for Finance Zhu Zhongming said today. The figure remains in a reasonable range, and the overall risks are controllable, he added.

The State Council will issue additional government bonds worth CNY1 trillion to support various provincial-level regions’ disaster prevention and relief capabilities in the fourth quarter, according to a decision approved yesterday by the Standing Committee of the 14th National People’s Congress, China’s top legislative body. Half of the proceeds are expected to be used this year, while the remaining half will be carried over to next year.

The National Development and Reform Commission and the MOF will set up a working mechanism with relevant departments to be sure local governments disclose the projects’ details, Zhu noted. The regulators will also require local governments to strictly use the funds for their scope, comprehensively organize and screen the projects, report project requirements in a timely manner according to procedures, and form project lists after the working mechanism’s review.

The MOF will also strengthen the supervision on the whole process of fund allocation with tracking and monitoring and timely discover and adequately deal with issues that may affect the efficiency of the funds’ use, Zhu added.

At the same time, the MOF will give full play to the territorial advantages of local supervision bureaus, organize the establishment of a regular supervision mechanism, formulate supervision plans, clarify the requirements of supervision tasks, ensure that funds are used according to the preset purposes, strictly investigate illegal acts such as crowding out and misappropriating funds, and improve the efficiency of the funds’ use, Zhu further explained.

Moreover, local regulatory responsibilities will be enhanced, and the use of government bond funds will be closely monitored.

Editor: Futura Costaglione