Measures to be taken to strengthen economy
CHINA is planning a number of measures to buoy economic growth in the second half of 1999, Finance Minister Xiang Huaicheng said yesterday.
A special treasury bond issue is expected to be launched, as happened last September.
The government is also considering raising incomes of the poorest urban residents to drive up consumption.
Retirees from State-owned enterprises and workers laid off from SOEs can expect higher pension or living allowances. Salaries of civil servants and employees working for State-sponsored institutions are also likely to be raised, he said.
Xiang made the remarks while speaking to reporters on the sidelines of a national conference on public finance management, scheduled from Wednesday to today.
Xiang said his ministry would propose an expanded government deficit for 1999, which was set at 150.3 billion yuan (US$18 billion) by the National People's Congress (NPC) at its annual session held in March.
The Standing Committee of the NPC would have the last say on the adjustment of the budget, he said.
Xiang said proceeds from the special treasury bond issue would be used to finance infrastructure construction as well as technology upgrading of key industries and equipment localization of some key projects.
High-tech industries, environment protection projects and improvement of facilities of research and education would also benefit from the issue, he said.
But he did not specify the volume of the proposed issue. Under the original budget, 341.5 billion yuan (US$41 billion) worth of treasury bonds was planned to be floated in 1999.
The volume of the special issue last September was 100 billion yuan (US$12 billion). The money from the issue was focused on an infrastructure building scheme.
Earlier this month, the Ministry of Finance announced it would raise tax refund rates for exports including textiles, garments and coal.
The increased government spending on industries, people's incomes and the raised tax rebate rates means the government intends to use fiscal policy to fuel all three major engines for economic growth _ investment, consumption and exports _ Xiang said.
"This reflects the central government's determination and courage in dealing with the problems in the economic sector," he said.
China's fiscal revenues totalled 529.4 billion yuan (US$63.8 billion) in the first half of 1999, representing a 24.3 per cent increase over the same period of last year.
Xiang attributed the rapid growth mainly to some unusual reasons _ the State's crackdown on smuggling, which led to a big growth in custom tariffs, and increased tax income in the petrochemical industry caused by the rebound of oil prices.
Date: 07/23/99
Author: Xu Binglan
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