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Monday, March 9, 2015, 09:33

Economy to get extra boost

By Zhao Yinan

China is ready to spend more than is proposed in the latest Government Work Report to help withstand downward economic pressure, as economic data in the first two months hint that the country is entering its slowest period of growth in a quarter-century.

Premier Li Keqiang said money not spent as planned last year as a result of officials' neglect will be reallocated this year to local governments that are doing a good job at driving economic development.

It's one of the measures that will be employed to encourage local officials to shake off a wait-and-see attitude and do more to boost growth.

Li, who made the remarks during a panel discussion with National People's Congress deputies from Sichuan province on Sunday, said the extra money will come from funds carried over from last year, which total more than 100 billion yuan ($28.7 billion). The money was not spent because local officials were neglectful of their duty, which resulted in many investment projects being halted, he said.

"The funds were allocated, projects were approved and land was supplied, but the money is not being spent. Why? Some officials are holding onto their jobs while failing to fulfill their responsibilities," he said.

The carry-over funds will provide money for development on top of the central government's annual budget deficit, which is set to widen to 1.64 trillion yuan in 2015, an increase of 270 billion yuan over last year, or about 2.3 percent of GDP, according to the Government Work Report delivered by Li on Thursday.

Finance Minister Lou Jiwei said at a news conference that the deficit will be around 2.7 percent, China's largest since the 2.8 percent recorded in 2009.

Economic indicators show that the slowdown of the world's second-largest economy is likely to continue into this year, after hitting a 24-year low of 7.4 percent in 2014. Retail sales growth is expected to slow further in February, along with industrial production and investment growth. The latest data are due out next week.

Yin Zhongqing, deputy director of the Finance and Economic Committee of the NPC, confirmed that the government will issue 1 trillion yuan of low-interest bonds to replace existing debt being raised through local financing vehicles, most of which involves short-term debt with high interest.

Yin said the eased monetary policy is part of the government's pro-growth measures to ensure economic expansion of around 7 percent in 2015, a tough target to meet.

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