China budgets record-high fiscal deficit in fight against global crisis

Source: Xinhua | 03-05-2009 11:46

BEIJING, March 5 (Xinhua) -- China announced Thursday a fiscal deficit budget of 950 billion yuan (139 billion U.S. dollars) for 2009, a record high in six decades, as the country boosts spending to cushion the impact of the global financial crisis.

The total deficit accounts for less than 3 percent of China's gross domestic product (GDP), said Chinese Premier Wen Jiabao at the opening of the parliament's annual session.

Despite the deficit surge, China's constant deficit drops in previous years provide room to issue more bonds this year, said Wen when delivering the government work report.

"The ratio of the cumulative balance of outstanding government bonds to GDP, which is around 20 percent, is within the acceptable range of what our overall national strength can bear and is therefore safe," he told the country's legislators.

China set this year's central government deficit at 750 billion yuan, 570 billion yuan more than last year, he said.