Adhering to a pro-active fiscal policy in the next one or two years will not bring about any

financial risks for China, Minister of Finance Xiang Huaicheng said in Beijing on January 26.

He told a press conference sponsored by the Information Office of the State Council this morning that considering the size of the budget deficit and government debt, continuing to adopt a pro-active fiscal policy within rational limits and issuing a certain amount of treasury bonds every year will not cause financial risks.

"This year's budget deficit will not increase remarkably from that of last year. It may even be smaller than that of last year, but is unlikely to be much smaller," he said.

Xiang said that the Ministry of Finance will begin to reform the compilation of the central government's budget this year, and for the first time in history, the interest expenditures of foreign and domestic debts will be included in the budget for this fiscal year.

He noted that though the tens of billions of yuan of interest spending will bloat the budget deficit, this does not necessarily mean that the government is borrowing more.

Xiang pointed out that the Chinese government saw a record growth of fiscal revenue in 1999, and will continue to carry out apro-active fiscal policy this year to offset the impact of inadequate domestic demand and international factors.

The Ministry of Finance will also modify the compilation of and more details to the central budget this year. It will also pioneer sectional budgets in four ministries, including the Ministry of Education, the Ministry of Science and Technology, the Ministry of Labor and Social Security, and the Ministry of Agriculture.

The budgets of these four ministries will be handed to the National People's Congress for the record along with the general budget of the central government.

In 1999, the proportion of the Chinese government's fiscal revenue in the gross domestic product (GDP) rose to around 13 percent from 12.4 percent in 1998.

Also last year, the central government's expenditures on education increased by over 20 percent from 1998, while expenditures for scientific undertakings, infrastructure construction, and social security, increased by 14 percent, 70 percent, and 170 percent, respectively. (Xinhua)