China plans to retructure debt, lower cost of raising funds

BEIJING (AFX-ASIA) - The government plans to restructure its debt, lower the cost of raising funds and set up a debt alarm system in a bid to avoid possible risks from a rising fiscal deficit and growing government debt, finance minister Xiang Huaicheng told a meeting of the China Development Forum yesterday, the Xinhua news agency reported. 	    The budget deficit is set to expand over the next two years and the government has said that it will raise 150 bln yuan in 2001 and a further 150 bln in 2002 through issuing treasury bonds. 	    Xiang said, however, that in the long run, current debt levels are still "bearable" and that the government will continue to implement a proactive fiscal policy to stimulate domestic demand until the country's economic base is strong enough. 	    Although the Chinese economy is now experiencing an upward trend, there is still a lack of demand and the tendency for deflation has not been fundamentally corrected, the China Daily reported Xiang as telling the forum. 	    But in two or three years' time, "when the foundation of economic growth is more consolidated, the government will adjust its fiscal policies", he said. The government's current fiscal policy stance will not lead to inflation, Xiang said. 	    "At present, the Chinese economy is growing steadily, enjoying abundant agricultural and industrial products and capital goods, as well as price stability. Therefore, a proactive fiscal policy and a proper increase in issuing treasury bonds will not lead to inflation," he said. 

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