Finance Minister Xie Xuren said Monday there would be growing difficulty balancing China's budget this year, and he urged officials to avoid unnecessary spending.

In a Lunar New Year greeting on the ministry's homepage, Xie said that the external and internal conditions affecting China's social and economic development in 2009 were "very severe" and more difficulties had to be overcome to achieve "steady and relatively fast" economic growth.

Xie said government funds should be used efficiently as the government carried out an active fiscal policy to support public investment while cutting taxes.

To stimulate the economy, the government has raised export tax rebates three times since July, increased farm subsidies and ended the value-added tax for equipment purchases -- a move that's expected to reduce companies' tax bills by 120 billion yuan (about US$17.4 billion) a year.

Moreover, the threshold for individual income tax, which now stands at 2,000 yuan per month, is likely to rise.

Although 2008 fiscal revenue grew an estimated 19 percent from 2007 to some 6 trillion yuan, the economic slowdown, falling corporate profits and tax cuts drove down fiscal revenue in the second half of last year.

Last year, the economy grew 9 percent year-on-year, ending a five-year period of double-digit growth.

Xie said earlier this month that the fiscal decline might continue this year. The Finance Ministry has imposed tighter controls on the general administrative expenditure of local governments.

For example, local governments have been ordered to limit the year's spending on car purchases, meetings, catering and overseas travel to no more than the amounts spent last year.

Jiangxi Province has urged officials to avoid unnecessary travel and vowed to cut meeting outlays by 20 percent from the 2008 level, catering expenses by 10 percent, and international business travel costs by 10 percent.

Many local governments, meanwhile, said they would step up investment spending in 2008. Shaanxi Province, for example, said it planned to invest 40 billion yuan in education, job re-training, public sanitation and social security, up 21 percent from last year, while Henan Province will invest 40 billion yuan to raise living standards.

These and other local governments announced investment plans after the central government put together a 4-trillion-yuan stimulus package in response to ebbing growth.

(Xinhua News Agency January 26, 2009)