Minister: Mainland finances face difficult year

Falling revenues and a surge in spending mean that China's finances will face difficulties this year, the South China Morning Post reported, citing comments from the Minister of Finance Xie Xuren. Speaking on Monday at an annual meeting on fiscal affairs in Beijing, Xie said, "It will be a difficult year. The problem of unbalanced income and expenditure will be prominent in 2009." China's fiscal revenue probably exceeded US$878.4 billion in 2008, up 19% from 2007, Xie said. However, economists expect China to post a budget deficit of anywhere between US$73.2 billion and US$117.1 billion this year. Speaking at the same conference, a vice chairman of the State-owned Assets Supervision and Administration Commission announced a rare decline in profits for China's state-owned enterprises (SOE). Huang Shuhe said that profits of SOEs directly controlled by the central government fell by about 30% to US$102.5 billion.