The SARS epidemic last spring in Beijing has prompted the municipal government to heavily invest in the public health sector this year, the city's top financial official said Tuesday.

Wu Shixiong, director of the Beijing Municipal Bureau of Finance, told the second session of the 12th Beijing Municipal People's Congress, the city's top legislative body, Tuesday that Beijing will spend 1.4 billion yuan (US$169 million) on health and medical treatment in 2004. That's 40 per cent higher than the planned health budget last year.

Despite the higher numbers on paper, however, the government will spend only marginally more than in 2003.

Unpredictable expenses connected to the SARS (severe acute respiratory syndrome) outbreak resulted in total health expenditures of 1.3 billion yuan (US$156 million).

The government also spent 1.5 billion yuan (US$180 million) to help industries hit by the outbreak such as hotel, entertainment, tourism and aviation by reducing taxes and other fees.

"Without SARS, the GDP of Beijing may rise 1 percentage point higher than the real figure of last year," said Ding Xiangyang, director of the Beijing Municipal Development Planning Committee Tuesday in his report.

Despite the negative influence brought by SARS, Beijing saw a boost in its gross domestic product of 10.5 per cent, 1.5 percentage points higher than the original goal.

Health expenditures this year will go mainly towards the public health sector.

A more effective disease prevention and treatment system will be established within the year.

Meanwhile, health services at residential communities will be enhanced in urban Beijing. In the rural areas, a co-operative medical system is to be established, said sources.

Besides the public health sector, investment in agriculture, education and scientific development will also be boosted, said Wu.

Meanwhile, nearly 4.5 billion yuan (US$540 million) will be invested in infrastructure construction of Beijing this year. Of that, 1 billion yuan (US$120 million) will be earmarked for construction aimed at the 2008 Beijing Olympic Games.

Beijing earned 59.3 billion yuan (US$7.2 billion) in fiscal revenues last year, an increase of 18 per cent over 2002.

For this year, the capital city set its fiscal revenue target at 64.8 billion yuan (US$7.8 billion) and GDP growth at 9 per cent.

(Xinhua News Agency February 18, 2004)