An official at China's central bank warned local governments throughout the country to rein in spending or else face a crackdown by central authorities. Beijing faults local officials for recent overinvestment, particularly in fixed assets. Provincial spending in the first two months of 2004 increased 65% year-on-year, compared to a 12% increase in central government spending during the same period. If local governments take advantage of lenient central bank policy, then severe austerity policies would be enacted, People's Bank of China vice governor Wu Xiaoling said, without elaborating.
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