BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh
BBCi CATEGORIES   TV   RADIO   COMMUNICATE   WHERE I LIVE   INDEX    SEARCH 

BBC NEWS
 You are in:  Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 


Commonwealth Games 2002

BBC Sport

BBC Weather

SERVICES 
Wednesday, 6 March, 2002, 08:08 GMT
China spends to avoid recession
Three delegates catch up on sleep at China's annual parliament session
Parliamentary sessions have proved tough going for delegates
test hello test
By Rupert Wingfield-Hayes
BBC Beijing correspondent
line
China says it will dramatically increase government borrowing and public spending this year as it attempts to spend its way out of the world economic slowdown.

Speaking to China's annual session of parliament on Wednesday, the country's finance minister said the government's budget deficit for the 2002 financial year would balloon to nearly $40bn.

With demand from its main export markets in America and Europe decreasing, China has little choice but to try and spend its way to continued economic growth - hence what China's finance minister is proposing.

The $40bn will be China's biggest ever budget deficit.

Tough challenges

Much of the money will be poured into large infrastructure projects in the hope of boosting economic growth and soaking up unemployment.

Chinese President Jiang Zemin rubs his eyes after a long day in parliament
WTO membership has opened China up to tough foreign economic competition

There will also be a 28% increase in spending on social welfare to help the millions of workers laid off from China's ailing state industries and a 18% rise in the military budget.

China's economy is facing particularly tough challenges this year.

The government says it needs the economy to keep growing at about 7%.

In the past, such growth has been driven by exports.

WTO entrance

But export growth is now slowing, and at the same time, China's entry into the World Trade Organisation is forcing it to open its own markets to foreign competition.

WTO membership is hurting government revenues as well.

China is being forced to slash high import tariffs that once made up a major part of its government finances.

See also:

22 Feb 02 | Asia-Pacific
Bush preaches democracy to China
21 Feb 02 | Asia-Pacific
China's heir apparent to visit US
21 Feb 02 | Business
China cuts interest rates
17 Sep 01 | Business
China enters WTO fold
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories