BEIJING, Dec 1: China will reduce the scope of its fiscal deficit spending next year and will issue some 110 billion yuan ($13.3bn) in special treasury bills, down from the 140 billion yuan issued this year, a leading economic planner said on Monday.

With the reduction in the size of the T-bill issue, the government would also shift the focus of fiscal spending to improving living and production conditions in rural areas, Ma Kai, head of the State Development and Reform Commission told the Xinhua news agency.

“The current economic situation is turning for the better, with corporate profits growing and non-government investment on the rise,” Ma said.

“Therefore the size of T-bond issuance can be scaled down.”

Funds would also be used to support the development of the impoverished western parts of the country and rejuvenating backward industrial zones in China’s northeast, as well as on public health facilities and basic education, he said.

Large-scale water conservancy projects and environmental protection would also get priority funding, he added.

Over the past five years up to 2002, China issued a total of 660 billion yuan in special treasury notes aimed at pump priming the economy in the aftermath of the 1998 Asian financial crisis.—AFP