China may set 2011 fiscal deficit at 900b yuan

08:40, December 21, 2010      

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China is planning to set its next year's fiscal deficit at 900 billion yuan ($135 billion), among which 200 billion yuan will be local bonds, the Century Weekly reported Monday, citing people close to the Ministry of Finance.

But 2011's figures still need to be approved by the National People's Congress in March. Before that, factors including domestic prices and major economies' recovery speed may influence the final numbers, the report said.

It is possible to squeeze the deficit if the US and European countries staged a stable recovery.

The Political Bureau of the Communist Party of China Central Committee announced on Dec 3 that the country will implement a proactive fiscal policy and a prudent monetary policy next year.

A "proactive fiscal policy" indicates that China's fixed-asset investment, especially investment by government, will keep gaining momentum in the coming year and needs proper deficit to shore it up.

From January to November, China's fiscal revenue reached 7.67 trillion yuan, exceeding the year's budget target by 281 billion yuan, laying a relatively solid foundation for reducing next year's deficit.

Source: China Daily
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