China mulls 370b stimulus package
by KathyWang/The Standard
Monday, August 25, 2008 China's leaders are carefully considering an economic stimulus package of about 370 billion yuan (HK$420.7 billion), including a 220 billion yuan new expenditure and 150 billion yuan of tax cut plan, that may ease the government's monetary policy by the end of the year, China Business News reported.
"Although the details are yet to be sorted out, there is such a plan, and it has been approved by a central finance planning team," state-run Xinhua News Agency said in a report yesterday.
The expenditure part will include the spending of 45 billion yuan on social welfare, 46 billion yuan on agriculture, 38 billion on education, 35 billion yuan on construction, and 28 billion yuan on import of energy and commodity products.
The package will also propose tax cuts of 150 billion yuan in total, including measures to raise the threshold of personal income tax, export tax rebate, and preferential tax packages for small and medium- sized enterprises.
However, concerns over whether to launch the plan within the year rose because officials aren't certain if the country has planned enough budget for it.
This year's snowstorms in southern China and earthquake in Sichuan have already cost China 35 billion yuan.
In the first half, China generated fiscal income of 3.4 trillion yuan, running a fiscal surplus of 1 trillion yuan.
Last week, JPMorgan released a report saying Chinese authorities were considering an economic stimulus plan of at least 200 billion yuan to 400 billion yuan. The controversial news, although unconfirmed by the authorities, helped boost the A-share index by nearly 8 percent in a single trading day.
p/s photos: Pace Wu Pei Ci