DATE=1/26/2000
TYPE=CORRESPONDENT REPORT
TITLE=CHINA-SPENDING (L ONLY)
NUMBER=2-258441
BYLINE=ROGER WILKISON
DATELINE=BEIJING
CONTENT=

VOICED AT:


INTRO:  China says it plans to continue massive 
government spending over the next one or two years to 
spur economic growth and consumer demand.  VOA 
correspondent Roger Wilkison reports China's finance 
minister says such a fiscal stimulus is needed to 
strengthen the economy, improve infrastructure and 
develop China's poor western regions.


TEXT:  Chinese Finance Minister Xiang Huaicheng says 
the government's high spending over the past two years 
has fostered economic growth of more than seven 
percent, funded important infrastructure projects and 
helped stimulate consumption.  Speaking through an 
interpreter at a Beijing news conference, Mr. Xiang 
says the policy was adopted in response to the Asian 
financial crisis and weak consumer demand.

            /////INTERPRETER ACTUALITY/////

The implementation of a pro-active fiscal policy in 
the past two years has made great achievements.  So we 
will continue to implement a pro-active fiscal policy 
this year.

            /////END ACTUALITY/////

Mr. Xiang argues that China needs to continue priming 
the pump for a while.  But he says he does not 
envision using massive government spending as a 
permanent policy tool.

            /////INTERPRETER ACTUALITY/////

I think that such a policy will be in place in the 
coming one or two years.  But we don't have to call it 
a medium- or long-term policy.We may make a 
readjustment in this policy by the time investment, 
consumption and exports are restored to a given level.

            /////END ACTUALITY/////

The finance minister did not disclose what those 
levels are.  Consumption has been decreasing for the 
past 27 months, and exports and investment were also 
on the decline last year in relation to 1998.

China's budget deficit -- the result in large part of 
its spending program -- now stands at nearly 22 
billion dollars.  But Mr. Xiang says Beijing can 
afford to continue its spending spree despite the 
deficit and the government's heavy reliance on loans 
from state banks to fund its projects.

            /////INTERPRETER ACTUALITY/////

The scale of the fiscal deficit is not dangerous. So I 
should say that to continue to implement a pro-active 
fiscal policy is the correct choice, and I do not see 
the danger or the risk of continuing such a policy.

            /////END ACTUALITY/////

Mr. Xiang says he hopes to keep this year's deficit 
lower than last year's.  But he says that may be 
difficult because China -- for the first time -- will 
include interest payments on foreign and domestic 
debts in the budget, in accordance with international 
standards.  The year 2000 budget is to be presented to 
China's legislature in March.  (SIGNED) 


NEB/RW/FC 



26-Jan-2000 04:40 AM EDT (26-Jan-2000 0940 UTC)
NNNN

Source: Voice of America
.