China's planned special bond issue to recapitalize state banks will mature in 30 years. China's M2 money supply is expected to grow 16-18 percent in 1998, M1 to grow 17 percent. The funds would mainly be applied to 1,500-2,000 state firms which were undergoing mergers and bankruptcies. China had applied 30 billion yuan in 1997 and 20 billion yuan in 1996 to write off bad debts. China also plans to float 280.86 billion yuan in domestic and overseas bonds this year.
China prepares to streamline the government.
The biggest revamping of the government since 1949 would decrease the net number of ministries and commissions to 29 from 40, with a final aim of slashing China's civil service by half within three years. The State Economic and Trade Commission would be the main beneficiary. According to Reuter's, China's economic game plan may sound like double-talk but its political leaders have deliberately left themselves some wiggle room. Beijing's 1998 budget and plans for a massive overhaul of state industry and government are drawn loosely to fit domestic political reality, it said. On Saturday, central bank chief Dai Xianglong appeared to undermine Premier Li Peng by giving a considerably higher figure for this year's fixed asset investment, a key figure for government spending plans and economic growth.