China will keep spending, says Zhu

Zhu Rongji (left) and President Jiang Zemin before Zhu delivered his opening address to the NPC

HONG KONG, China -- China will continue heavy government infrastructure spending, keep its yuan currency stable and stimulate consumption, Premier Zhu Rongji said Monday.

Zhu delivered the opening speech at the 2001 session of the ninth National People's Congress, China's parliament.

"In the near future, we will continue to implement a proactive fiscal policy to increase investment and stimulate consumption," he said.

The government would issue another 150 billion yuan ($18.12 billion) in bonds this year to fund spending on infrastructure as part of that fiscal policy, he said.

"We will issue 150 billion yuan of long-term treasury bonds and invest the ensuing revenue in projects under construction and development projects in the western region."

Funds being poured into western provinces

A year ago, China launched a massive scheme to pour state funds into infrastructure to boost growth in impoverished western provinces lagging well behind the thriving coastal areas.

"We will continue to implement a prudent monetary policy and regulate money supply in a timely fashion to keep the renminbi stable," he said.

China's five-year plan for 2001-05 -- the main business of the NPC's March 5-15 session - has set a target for annual Gross Domestic Product growth of around 7.0 percent over the period, Zhu told lawmakers.

"We have set the target for the average annual economic growth rate in the 10th Five Year plan period. Though slightly lower than the actual growth rate of the 9th Five Year plan period it is still fairly high," Zhu said.

Goal is to double size of the economy by 2010

He also said China aimed to double the size of its economy by 2010.

"Arduous efforts have to be made to attain this target through better economic performance," he said.

The government's goal was to keep urban unemployment levels under five percent in the 2001-05 period, Zhu said.

China would have to create 80 million jobs during the five-year period -- 40 million for new urban jobless and 40 million for people shifted to the urban economy from the farm sector, the premier said.

China's economy grew eight percent last year, powered by massive state spending on infrastructure. A pickup in consumer confidence and strong exports also played a role.

Reuters contributed to this report.

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