TNAG-2791-FCO40-4030-Relations-between-Hong-Kong-and-China.-With-maps-1993 — Page 61

CONFIDENTIAL

10

機密

deficit-ridden government budget(12).

18.

It therefore appears

more likely that the

government will resort largely to monetary measures in adjusting economic activity. On 18 January 1993, Premier

Li Peng told a national financial conference that the

banking sector should bear a major responsibility in curbing inflation and excessive economic growth. Further, in presenting his work report to the Eighth National

People's Congress in March 1993, he reiterated the government's concern about the upsurge in inflation rate,

introduction of certain macroeconomic

and called for the

controls in order to achieve a better balance between

economic growth and price stability. This view was echoed by other Chinese leaders. In early April, senior officials of the People's Bank of China indicated that a tighter

monetary policy would be pursued to contain the

intensifying inflationary pressures.

(12)

1986

1987

1988

1989

1990

1991

1992

China's fiscal deficit, 1986-1992

Fiscal deficit (Rmb billion)

Adjusted fiscal deficit' (Rmb billion)

-7.1

-8.0

-7.9

-9.2

-14.0

-21.1 -23.7

-20.9

-24.9

-34.9

-37.5

-51.5

-66.6

-90.5

declared

* This is the officially

fiscal deficit plus the increase in total government debt, including both domestic and foreign debts. Most major industrialised countries reckon their fiscal deficits on this basis, i.e. a deficit is budgetted for and then the borrowing requirements are prescribed.

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CONFIDENTIAL ##