(9 March 2004 – China) The Chinese government is seeking to curb the rapid economic growth the country has experienced over the past few years by cutting back on credit and state spending.Beijing is aiming at seven percent growth for 2004 after gross domestic product increased 9.1 percent in 2003 due to the growth of new factories and exports. Inflation running at 3.2 percent in January was the highest level in seven years.
The country has suffered from a weak banking sector crippled by debt from inefficient state enterprises. The state government was forced to rescue Bank of China and Construction Bank and reform the banking sector to make it more attractive to foreign investment.
The government has said it aims to cut back on issuing special stimulus bonds by some 20 percent in 2004 and continue trimming over the next few years.
On the other hand, China plans to stimulate the regional economy by increasing subsidies for farmers.