China to raise national budget deficit to US$192bn

China plans to increase its annual budget deficit this year to 1.2 trillion yuan (US$192 billion) and use it to support its financial policies and ensure economic growth.

The country's Ministry of Finance handed over its budget draft this year to the Financial and Economic Committee of the National People's Congress a month and half before the congress holds its annual meeting from March 5 this year, according to Shanghai's Oriental Morning Post.
The budget deficit is said one of the three main financial policies of government this year, said the financial research center of state-owned Bank of Communication. It will also be used to support tax reduction and increase investments on infrastructures.
Around 450 billion yuan (US$72 billion) of the budget will be used on municipal governments while the remaining 750 billion yuan (US$120 billion) will be spent on the central government. It is higher than the budget deficit of 1.07 trillion yuan (US$172 billion) last year, according to the newspaper.
The deficit spending on tax reduction and infrastructure would have a significant influence that drives the growth of Chinese economy, the bank's research center said. The center also predicted that national GDP growth will be around 8.5% this year.