Beijing: China`s fiscal budget deficit will shrink next year as government spending declines with a paring back of stimulus efforts, while bank lending is also set to fall, influential former lawmaker Cheng Siwei said on Saturday.
The Chinese government has said it would stick to a proactive fiscal policy and moderately loose monetary policy in coming months, but Cheng said fine-tuning would also be in the cards.
"For instance, there will be a fiscal budget deficit (next year) but the deficit will be smaller than this year`s 950 billion yuan (USD 139 billion)," Cheng told a financial forum.
China`s fiscal revenue conditions have also improved in recent months as the economy recovers.
Cheng added that the target for new bank lending next year would be smaller than this year`s hefty 10 trillion yuan.
China is set to achieve its 8 percent growth target for gross domestic product in 2009 due in large part to massive government stimulus, after reporting 7.7 percent growth in the first nine months.
"But we can`t always rely on government-backed investment to promote GDP," Cheng said.
He proposed a series of measures to make Chinese consumers more able and willing to spend, including cutting the personal income tax, improving social welfare coverage and making it easier for rural migrant workers to settle in cities.