Wed, May 27, 2009
Business > Economy

China quickens spending, bond issues to aid economy

2009-05-27 10:26:44 GMT2009-05-27 18:26:44 (Beijing Time)  SINA.com

BEIJING - China's central government has already spent more than 60 percent of its 2009 investment budget, frontloading spending on everything from infrastructure to education in order to boost growth.

The central government has so far allocated 555.3 billion yuan ($81.32 billion), or 61.2 percent of the investment budget, the official Xinhua news agency quoted Vice Finance Minister Zhang Shaochun as saying.

"The Ministry of Finance has quickened the pace of appropriations so the impact of fiscal spending is felt as soon as possible," Zhang said.

In its budget released in March, the ministry said its 908 billion yuan investment budget would include spending of 208 billion on agricultural infrastructure and 232 billion yuan on roads, railways and other transport-related public works.

The Finance Ministry also said it had already issued more than half of the 200 billion yuan in bonds that it plans to sell this year on behalf of local governments.

Since the first bond was launched on March 20 for the western region of Xinjiang, the ministry said it had sold 111.8 billion yuan worth of paper on behalf of 23 provinces.

In a statement posted on Wednesday on its website, www.mof.gov.cn , the ministry said demand for the bonds was mainly from commercial banks.

Strapped for cash due to declining tax revenues, local governments need the proceeds to help finance their share of Beijing's 4 trillion yuan economic stimulus plan.

(Agencies)

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