A multi-million water screen film project in a poverty-stricken county in Zhangjiakou, North China's Hebei Province is under investigation after a film director raised questions about its sources of funding online early this week.

"The Wanquan district government has set up a joint investigation team with departments including Commission of Discipline Inspection, bureaus from auditing, finance, public security, and Development and Reform Commission," read a statement sent to Global Times by Xie Feng, deputy head of the Publicity Department in Wanquan district. 

The local government is still trying to get into contact with project contractor, Chu Kun Culture Technology Co, a Wuhan-based company, said the statement, adding that the government vows to work on investigation and any misconduct that violates the Bidding and Tendering Law will be probed. 

Chen Xi, a movie director, has posted a tip-off saying that Wanquan district invested 40 million yuan ($5.8 million) in a 30-minute water screen film project. The project had been subcontracted to several companies and still owed him 45,000 yuan. 

As the implementing company, Chen claimed that his company was owed 100,000 yuan.

In an interview with China National Radio, Chen confirmed that he deleted the original post after the debt had been paid to him. He also indicated that he had been threatened because of the post's content. 

In the statement, the Wanquan government corrected the contract total amount to 38.52 million yuan. The project was split into two bids to work on infrastructure, film production, animation, live shooting, editing and equipment procurement, it said. 

Right after his post titled "How did a poverty-stricken county spend 40 million yuan" went viral online from Chen's company's WeChat account, questions were raised over the subcontracting issues for the project in this poverty-stricken county.

Many netizens found it questionable to spend millions of yuan on tourism projects instead of making people's livelihood a priority in this impoverished area. 

Li Guoxiang, a research fellow at the Rural Development Institute under the Chinese Academy of Social Sciences, told the Global Times on Wednesday that the key question in this case is the source of the funding. 

"Was it designated to the poverty-stricken county as loans under the 2020 poverty alleviation campaign? If so, even if the local authority has the power to decide on investment, there are tasks to deliver," he noted. 

Li stressed that such dedicated funding is meant for projects involving healthcare, education or housing. He urged the government to take a close look at the project's approval and auditing processes. 

As of press time, Chu Kun Culture Technology Co could not be reached for comment. 

Previously a county, Wanquan was integrated into Zhangjiakou as one of the city's districts in 2016. The government believes the tourist industry is the main source for its economy, the statement said.