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State Mulling 18-Billion-Dollar Spending to Boost Economy

China is mulling an 18 billion-dollar stimulus package for next year in a bid to ensure the improving economy does not lose momentum, Finance Minister Xiang Huaicheng said.

Xiang, in interviews with the Financial Times and Wall Street Journal, said Beijing would likely issue the same amount of bonds next year as 150 billion yuan in 2000 (US$18 billion).

He said 100 billion yuan (US$12.05 billion) would be raised through special infrastructure bonds and 50 billion yuan (US$6.02 billion) of bonds to fund the campaign to invigorate China's impoverished Western regions.

Xiang said the government had issued around 360 billion yuan (US$43.37 billion) of bonds over the past three years to stimulate growth through infrastructure spending and technical upgrades at state firms.

He said taking into account extra funds from state banks, local governments and state enterprises, the economy had received 1.5 trillion yuan in extra spending over the three year period.

Xiang said spending had provided the impetus to turn around seven years of slowing growth, the economy this year is expected to grow by eight percent compared to a decade low of 7.1 percent last year, and would continue for at least a year.

The Financial Times said the new spending plans would be put to parliament, the National People's Congress, at a meeting next week.

The Asian Development Bank (ADB) has predicted China's economic growth will fall slightly to around 7.5 percent.

(People's Daily 12/21/2000)

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