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Domestic needs get US$133b lift

CHINA will spend 908 billion yuan (US$133 billion) of its stimulus package to boost domestic demand this year, with 487.5 billion yuan coming from the central government.

Rural infrastructure and livelihood projects will consume 252.2 billion yuan, accounting for 27.8 percent of the total spending, and key infrastructure such as railways, roads and airports will eat up 213.4 billion yuan, the Ministry of Finance said in a statement on its Website yesterday.

About 10 percent of the spending will be used for medical, health and education, and 14.3 percent will be invested to rebuild earthquake-hit regions, the ministry said.

The funds are part of the country's 4-trillion-yuan stimulus package, of which the central government will provide 1.18 trillion yuan and the rest will come from local governments, policy loans and corporate bonds.

Among the 1.18 trillion yuan, the central government spent 104 billion yuan in the fourth quarter of last year, and will spend 487.5 billion yuan this year and 588.5 billion yuan next year, according to the statement.

So far, 591.5 billion yuan of the 1.18 trillion yuan has been used, with 33.8 percent in earthquake-hit regions, 21.2 percent in rural infrastructure projects and 8.8 percent on affordable homes.

China unveiled the stimulus package in November, which has started to gain traction and led to improvement in the country's industrial production and investment in recent months.

Its economy grew a better-than-expected 6.1 percent in the first quarter on an annual basis, and China has targeted a growth of 8 percent for this year, although it is still reeling from the global recession.

The World Bank has raised its 2009 forecast for China's economic growth to 7.2 percent from 6.5 percent as a result of the boost from the stimulus.


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