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Wen: new package on top of previous stimulus plan

THE 1.18-trillion-yuan (US$172 billion) investment China's central government is planning is new in its economic stimulus package, Prime Minister Wen Jiabao said this morning at a press conference in Beijing.

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

Wen was answering a question from China Daily. He said there had been a misunderstanding that had led to recent wide fluctuations on global stock markets.

The 1.18-trillion-yuan investment is in addition to the 4-trillion-yuan investment plan the country announced last year to fight the global economic slowdown over the next two years.

The government has allocated 595 billion yuan of the 1.18 trillion yuan in this year's budget, he added.

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

It will be used to cut taxes by up to 600 billion yuan, he said. And it will help raise pensions for the retired and to pay for the country's 12 million teachers as well as increase subsidies for farmers. A total of 850 billion yuan will be used to reform the medical system, he added.

The 1.18-trillion-yuan investment is part of the economic stimulus package China has developed over six month, Wen said. He 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.


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