Frugality in Vogue

Chinese Premier Wen Jiabao ordered a cut in 2009 government "hospitality" budgets on March 24, signaling that the government will take the leading role in promoting frugality and ensuring that government spending goes where it is most needed amid the economic crisis.

HIGH-LEVEL STATEMENT Chinese Vice Premier Li Keqiang addresses the opening ceremony of the China Development Forum 2009 in Beijing on March 22 and stresses China's determination to fight the global financial crisis with the international community (LI XUEREN)

Wen ordered an across-the-board halt until the end of 2010 to the building of any new office compounds, or any glitzy buildings in the names of training centers and hotels.

Wen also ordered a 15-percent cut in the government's car-buying budget, a 15-percent decrease in fuel budgets and a 20-percent cut in officials' overseas tour budgets compared to the average spending of the past three years.

Business Slowdown

China's industry and commerce authorities said the number of businesses established in China rose only 0.78 percent year-on-year in 2008, much slower than the average 5-percent growth over the last five years.

The statistics also showed that more companies had been established in the western and central areas as the country made efforts to bring more industries to the regions, while the number of companies fell in the more-developed eastern region due to the financial crisis.

The State Administration for Industry and Commerce said private-sector and foreign-funded companies continued to show stable growth despite the global economic crisis. By the end of 2008, the number of private businesses stood at 6.57 million, up 9 percent, or 543,700.

Treasury Transparency

China's Ministry of Finance (MOF) released the central fiscal budget for 2009 on its website, a week after it was approved by the Second Session of the 11th National People's Congress, China's top legislature.

It is the first time accounts revealing the details of the annual budget have been published, including central fiscal income and spending, tax revenues and government transfer payments.

"The release of the fiscal data online will help strengthen public supervision of government work and prevent corruption," said MOF Spokesman Hu Jinglin.

Monthly data of government income and expenditure is also available on the ministry's website.

No Speculating

China's State-owned Assets Supervision and Administration Commission (SASAC) tightened rules on the conditions under which state-owned enterprises (SOEs) could use derivatives on March 24.

In a statement, SASAC said the low risk awareness of a few SOEs had presented a serious danger to the safety of state assets. SOEs should use derivatives "cautiously" and "strictly" follow hedging rules. No speculative trading is permitted, the statement said.

Several central SOEs have reported huge derivatives losses since last year as the global financial crisis has spread.