The basis for China's economic recovery is still not solid enough, and central government investment will remain large next year, a government work group that oversees stimulus spending said on Thursday.
“China is facing a very complicated situation in its economic development, with favourable and unfavourable impacts rising at the same time,” the work group said in a statement.
Meanwhile the government will deliver on its commitment to spend 1.18 trillion yuan ($173 billion, Rs 807910 cr) before the end of 2010, the core of the country's stimulus package, a deputy finance minister said on Thursday.
The central government has pledged that the amount out of its own pocket to support the overall 4 trillion yuan stimulus programme, credited with helping the world's third-largest economy recover from the impact of global financial turmoil.
The promise not to pull back could serve to reassure markets hit by concerns over tightening in the property sector and
worries that tougher lending practices could slow growth from the 8.9 per cent annual pace in the third quarter.
Deputy Finance Minister Zhang Shaochun told reporters that actual spending in 2009 would slightly exceed the originally planned 487.5 billion yuan, after it doled out 104 billion yuan for the stimulus package in late 2008.
{{/usCountry}}Deputy Finance Minister Zhang Shaochun told reporters that actual spending in 2009 would slightly exceed the originally planned 487.5 billion yuan, after it doled out 104 billion yuan for the stimulus package in late 2008.
{{/usCountry}}That could mean somewhat less than 588.5 billion yuan gets spent next year, as originally earmarked, but the overall amount of spending from central coffers would remain the same, he said.
“There is no change regarding the 1.18 trillion yuan government spending plan,” Zhang said.
Beijing has said it would maintain its proactive fiscal policy and appropriately loose monetary policy stance in 2010, something Zhang reiterated.
The need to keep government investment at a high level was underlined by a government work group that oversees the stimulus spending.
“China is facing a very complicated situation in its economic development, with favourable and unfavourable impacts rising at the same time,” the work group said.
That assessment was echoed by Li Rongrong, head of the state-owned enterprises watchdog, who said in a speech that the economic recovery was not yet on solid ground.