China Pledges to Implement Pro-active Fiscal Policy

Chinese Finance Minister Xiang Huaicheng said Saturday the Chinese government decided to continue the pro-active fiscal policy in 2000 with a view to maintaining the growth momentum.

The Chinese government attaches importance to the coordination between fiscal policy and monetary policy, thereby rendering the latter more effective in optimizing macro-economic management, he said at the on-going 7th APEC Finance Ministers Meeting which opened Saturday.

He said that as a developing country, China must successfully deal with the tripartite relationship between reform, development and stability.

He said over the last two years, the monetary policy has played a role in stimulating domestic demand and promoting sustainable growth through bank intermediation for infrastructure development, technical upgrading of enterprises, rural development, and household consumption.

He told the meeting that in the first six months this year, China's gross domestic product(GDP) grew by 8.2 percent, fixed investment was up 11 percent, the aggregate retail sales went up by 10.1 percent, the trade surplus amounted to 12.4 billion U.S. dollars, the foreign exchange reserves stood at 158.6 billion U.S. dollars by the end of June this year, and deflationary pressure eased.

To maintain the growth momentum, China will increase the bond issuance this year by RMB Yuan 50 billion (some 6 billion dollars) as a follow up to the additional bond issuance of RMB Yuan 100 billion and 60 billion in 1998 and 1999 respectively, he said.

In promoting economic growth through strengthening the marco-economic management, the Chinese government has been closely monitoring the macro-economic indicators to prevent possible fiscal and financial risks, he said.

He stressed that a sound social security system is the precondition of State-owned Enterprises' reform and social stability, therefore the Chinese government has attached great importance to building up the social security system and readjusted the expenditure structure to ensure adequate spending on priority items including social security.

In 1999, China's budget spending for social security registered RMB Yuan 36 billion, 1.1 times as much as that for the previous year, he said, adding that in 2000, budgetary funding for social security is expected to be further increased by RMB Yuan 70.7 billion.

He said China's capital market will be better regulated and broadened to provide reliable resources for the social security system and at the same time, China will build a unified, standard and sound social security system through enhancing the legal framework and reforming the medical insurance system.

The minister said China has maintained the stability of its currency since 1998, making contribution to the regional economy in its efforts to overcome the Asian financial crisis.

China's steady growth momentum and forthcoming accession to WTO will help promote its trade and investment relations with the rest of the region, he said.

The Chinese minister pledged that China will continue to make efforts to contribute to the economic recovery and development in this region.



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