Chinese authorities have seized up to 1 trillion yuan ($157 billion) from local governments that failed to spend their budget allocations, sources said, as Beijing seeks ways to stimulate economic growth, which is at its slowest for 25 years.
The huge underspend, linked to officials' reluctance to splash out on big-ticket projects while authorities crack down on corruption, supports the argument of some economists that Chinese state investment has grown too slowly this year.
"In the past, local governments had asked for the money. Money was given, but no one acted," said one of two sources, both of whom are close to the government.