Budgetary fiscal deficit to exceed ¥950b in 09

The Chinese government has announced a ¥950 billion fiscal deficit this year to rein in the tumbling economy. "The deficit could be tolerated as it would account for 2.6% of gross domestic product given an 8% growth," Lu Zhengwei, chief economist with Industrial Bank. Zhang Bin, a senior researcher with the Chinese Academy of Social Science, said it was more imperative to boost household incomes than to invest. "Investments make GDP figure look nice but does very little to benefit the physical economy."

$1 = ¥6.8