China plans 50% increase in budget deficit

China aims to widen the budget deficit by 50% to US$192 billion (RMB1.2 trillion) next year, Bloomberg reported, citing a source with knowledge on the matter. The government will line its coffers with a US$56.1-billion bond sale and is aiming for a central government deficit of US$136.25 billion. The trade growth goal will be 8%, less than the 10% target this year, the source said. The US$192 billion figure is higher than the US$128.22 billion level aimed for this year, which comprised a US$88.16 billion central government deficit and US$40.07 billion in bond sales. A larger deficit may provide China’s new leaders with the freedom to cut taxes and take steps to bolster consumer demand and urbanization. The leadership usually discloses concrete targets at the legislating authority’s yearly meeting in March.