As Beijing struggle to oppose an economic slowdown, up to 1 trillion yuan ($157 billion) were seized by Chinese authorities from local governments failing to use their budget allocations.

Following data suggesting economic growth was running below the 7 percent target level for 2015, China's stocks fell significantly, heightening global concerns about the strength of the Chinese markets.

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Many analysts started to question the health of the world's second largest economy. For example, Gu Yongtao, strategist at Cinda Securities declared that investor sentiment remains weak while China's economy faces relatively big downward pressure.

Budget funds repossessed from local governments will be used to pay for other investment projects, declared two unnamed sources close to the China's government, according to Reuters.

While authorities crack down on corruption, Chinese officials are reluctant to venture into big-ticket projects. The huge funds left unspent support the argument of some analysts claiming that this year Chinese state investment has grown too slowly.

One of the unnamed sources declared that local governments had asked for the money in the past, they received the funds, but no one acted.

China's National Development and Reform Commission (NDRC) declared on Monday that it had approved feasibility studies worth a total of 6.2 billion yuan ($973.65 million) for two road projects.

This is a sign that rather than trying deeper reforms to push economic growth in the short term, the Chinese authorities are focusing on infrastructure spending.

China's government also announced its plans of restructuring state-owned enterprises (SOEs) and to allow private investment. However, the announcement appeared to offer little cheer for investors, according to reports. On Tuesday Chinese stocks continued their downturn slide dropping 4 percent, according to the Wall Street Observer.

This will be a huge task that could involve more than 100 enterprises managed centrally under the State-owned Assets Supervision and Administration Commission (SASAC) and around 25,000 enterprises owned and managed by local governments according to Reuters.

Zhang Xiwu, deputy head of SASAC, declared on Monday in a news briefing that China would restrict state investment in industries not in line with national policies and centralize state-owned capital in key industries.

TagsChina's economy slowing, China's new projects, China's economic slowdown, china's economy