China sees growing difficulty balancing budget amid "severe" conditions

Special Report:Global Financial Crisis

BEIJING, Jan. 26 (Chinese media) -- Finance Minister Xie Xuren

said Monday there would be growing difficulty balancing China's budget this

year, and he urged officials to avoid unnecessary spending.

In a Lunar New Year greeting on the ministry's

homepage, Xie said that the external and internal conditions affecting China's

social and economic development in 2009 were "very severe" and more difficulties

had to be overcome to achieve "steady and relatively fast" economic growth.

Xie said government funds should be used efficiently

as the government carried out an active fiscal policy to support public

investment while cutting taxes.

To stimulate the economy, the government has raised export

tax rebates three times since July, increased farm subsidies and endedthe value-added

tax for equipment purchases -- a move that's expected to reduce companies'

tax bills by 120 billion yuan (about 17.4 billion U.S. dollars) a

year.

Moreover, the threshold for individual income tax,

which now stands at 2,000 yuan per month, is likely to rise.

Although 2008 fiscal revenue grew an estimated 19

percent from 2007 to some 6 trillion yuan, the economic slowdown, falling

corporate profits and tax cuts drove down fiscal revenue in the second half of

last year.

Last year, the economy grew 9 percent year-on-year,

ending a five-year period of double-digit growth.

Xie said earlier this month that the fiscal decline

might continue this year. The Finance Ministry has imposed tighter controls on

the general administrative expenditure of local governments.

For example, local governments have been ordered to

limit the year's spending on car purchases, meetings, catering and overseas

travel to no more than the amounts spent last year.

Jiangxi Province has urged officials to avoid

unnecessary travel and vowed to cut meeting outlays by 20 percent from the 2008

level, catering expenses by 10 percent, and international business travel costs

by 10 percent.

Many local governments, meanwhile, said they would

step up investment spending in 2008. Shaanxi Province, for example, said it

planned to invest 40 billion yuan in education, job re-training, public

sanitation and social security, up 21 percent from last year, while Henan

Province will invest 40 billion yuan to raise living standards.

These and other local governments announced

investment plans after the central government put together a 4-trillion-yuan

stimulus package in response to ebbing growth.

China's economy to rebound in 2010,

chief economist

CHANGCHUN, Jan. 10 (Chinese media) -- China's economy

will not recover until 2010, as it needs time for government stimulus policies

to take effect, a senior economist said Saturday.

Fan Jianping, chief economist of the State Information

Center, a top government think-tank, made the remarks at a forum in Changchun,

capital of the Northeastern Jilin Province. Full story

Rising stocks, dim export: economists

post new year outlook for China's economy

BEIJING, Jan. 5 (Chinese media) -- Chinese shares rose on new

year's first trading day, raising people's expectations about the country's

economy. Chinese media has collected experts' views on much-talked-about economic

topics here Monday.

The domestic stock market is expected to rebound in 2009

after Waterloo-like condition last year. The benchmark Shanghai Composite Index

tumbled to around 2,000 points by December from its peak at 6,124 in 2007.Full story