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Wen: New government funding part of plan

THE 1.18-trillion-yuan (US$172 billion) government-funded investment, part of China's 4-trillion-yuan economic stimulus plan, will be new funding, Premier Wen Jiabao said this morning at a press conference in Beijing.

The country will introduce more stimulus policies if needed, he added.

Wen said there had been a misunderstanding about the stimulus plan that had led to recent wide fluctuations on global stock markets.

The 1.18-trillion-yuan investment, directly from the central government, is part of the 4-trillion-yuan stimulus plan the country announced last year to fight the global economic slowdown over the next two years. The rest of the 4 trillion yuan will come from local governments, individuals and corporations.

The central government has allocated 595 billion yuan of the 1.18 trillion yuan in this year's budget, Wen disclosed.

He said the 1.18 trillion yuan will be used for projects to improve people's life, technological innovation, environmental protection and major infrastructure.

China worked out its economic stimulus package after six-month efforts, Wen said. The package covers four areas: government input, industrial restructuring, support for technological development and improvement of the social welfare system.

He described the four aspects as an interrelated whole and believed the measures will help revive the economy both in the short term and the long term.

China will spend more money to cut taxes by up to 600 billion yuan, Wen said. And the country will help raise pensions for the retired and to pay for the country's 12 million teachers as well as increase subsidies for farmers. It will allocate another 850 billion yuan to reform the medical system.


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