9 of GDP end 2007 and can afford some deficits

This year, Wang Ping Hotel, one of the 2.985 delegates of the Chinese Parliament that began this morning its annual plenary session in Beijing, is less spacious than to the usual. And there will be no disposable toothbrush in the bathroom. Beijing has decreed "frugality". Seeking to stage its solidarity with the population one of the most serious economic crises of the past 20 years, the central authorities have announced that they wanted to reduce the budget and the duration of their parliamentary session nine days against thirteen year last to focus all their energy and their financial resources on the revival of growth thathit by the decline in exports and the lack of dynamism of the domestic consumption was limited to 6.8 in the last quarter of 2008 while she had jumped by 13 in 2007.

After having announced last November, a gigantic recovery plan of 4,000 billion yuan (465 billion euros), to the still vague, the Government must make from today the details of his other projects to support the economy and likely to unveil a second wave of spending. "Budgets should be larger and last longer," said Sun Mingchun, an expert of Nomura Securities.

Target of 8 of growth

In a note, Stephen Green, of Standard Chartered Economist, ensures that with him, officials have mentioned the finalization of a comprehensive recovery plan "to 8,000 or 10,000 billion yuan" (1,162 billion euros). Or... 33 of China's GDP. "The formalization of this figure would be a boon for boosting confidence." "An announcement this week before Parliament is likely," said the expert. According to his calculations, the objective of 8 growth in 2009, Wen Jiabao call its greeting today his great speech on the State of the nation, would therefore "achieved without difficulty."

Before the opening of the parliamentary session, several provincial governors have already asked publicly an acceleration of public spending programs to compensate for the lack of dynamism of their businesses and reassure the population, which could, in the event of prolonged stagnation of international trade, becoming the new engine of domestic growth.

If they recognize that the major projects of infrastructure (motorways, airports, railways...), provided for in the first phase of the Chinese stimulus plan, will allow to give work to millions of people, experts argue now for the massive injection of liquidity in the system of social protection, which is still only a tiny minority of the inhabitants of the country. Without unemployment insurance, without protection health, supplementary retirement, several hundreds of millions of Chinese continue to save the bulk of their income to prevent possible accidents of life and are reluctant to consume. In his last report, the China Development Research Foundation, a "think tank" of the Government, says that funding to 2020 of a comprehensive social security system would cost 5.700 billion yuan (662 billion euros).

Low debt

The country has the means. After years of strong growth, the State is little debt barely 20.9 of GDP end 2007 and can afford some deficits. Next week, parliamentarians should also validate without denies a draft budget 2009 including a deficit of 1,000 billion yuan (116 billion euros), which would barely be 3 of GDP 2008, far from the 12.3 programmed on the same period, in the United States, by the Obama administration.