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To: jmhollen who wrote (4666)	9/6/1999 7:24:00 AM
From: jmhollen	Read Replies (1) \| Respond to of 7209

"..From the jus' so's ya know Department..": BEIJING (AP) _ Hoping to stimulate more consumer spending, the government plans to raise the salaries of low- and middle-income urban residents by a third or more, state-run media reported today. The long-awaited pay raise, to be implemented this month, will affect more than 84 million people and cost $6.54 billion, the China Daily and other official newspapers said. Under the plan, monthly allowances for the unemployed and the minimum living standard level for urban Chinese also will be raised by 30 percent, the paper reported, citing a statement issued Sunday by the vice minister of finance, Lou Jiwei. The average pay for civil servants affected by the salary rise is $48 per month, according to the People's Daily. The increase will apply retroactively to all payments made from July 1 of this year, it said. Civil servants' salaries and pensions for retired state workers will also have moderate increases that will vary depending on position and seniority, the report said. The government will force state-sector companies to make good by the middle of September on all pension payments due retired workers through June of this year, it said. The announcement of the pay-raise package, which has been discussed in China's state media for weeks, is part of a series of measures to boost flagging economic growth. Weak domestic consumption and rampant oversupply have sent China's prices into a 22-month tailspin that is bruising producers. With exports and foreign investment also in a slump, China posted disappointing first-half economic growth of 7.6 percent. Last week, China's Finance Ministry announced a $7.26 billion special bond issue to fund fiscal-stimulus spending on infrastructure, innovation and environmental protection. China's national legislature last week repealed a tax exemption for income from bank deposit interest, paving the way for a new 20 percent levy on interest income designed to discourage savings and propel consumer spending. Raising incomes will "gradually change the current situation of falling expectations for incomes, rising expectations for expenses, weak consumption desire among high-income residents and inadequate spending power among low-income residents," the People's Daily quoted Lou as saying. The bulk of the cost for the pay increases in most of the country will be shouldered by the central government. But local governments in seven of China's most economically advanced administrative regions will pay the full cost of local income increases themselves. The new policy does not affect the salaries of employees "whose income levels are directly linked to the economic performance of their enterprises," the China Daily said. It added that such salaries will instead be lifted by improved returns at state companies yielded by expanded state investment.