Jia Kang, director of the Financial Science Research Institute under the Ministry of Finance, told China Securities Journal Sunday that China has formulated a new stimulus package to tackle the severe challenges facing the economy, but its implementation will depend on second quarter economic indicators.

The 4-trillion-yuan (US$585 billion) stimulus package introduced last year will take time to produce results and indicators for the first quarter of 2009 will be disappointing. Jia said economic indicators for the second quarter would be a better guide to overall performance, and will be crucial for this year's economic recovery.

According to Jia, the government is likely to launch its new stimulus plan if clear effects of the 4-trillion-yuan stimulus package are not seen by the end of the first quarter, and second quarter results are lower than expected.

To promote development of rural areas and small and medium-sized enterprises, Jia suggests adopting policy–related financing instruments while implementing a proactive fiscal policy, such as discounts and credit guarantees; The issue of local government bonds in some areas is also worth trying.

For more details, please read the full Chinese coverage at:

http://paper.cs.com.cn/html/2009-03/23/content_20008074.htm

(China.org.cn by Fan Junmei March 23, 2009)