Chinese Shares Rise 1.04% on Record High Fiscal Deficit Budget

Chinese shares closed 1.04 percent higher Thursday than the previous closing as a 6-decade-high fiscal deficit budget was announced, analysts said.

The benchmark Shanghai Composite Index rose 1.04 percent, or 22.97 points to close at 2221.08. The Shenzhen Component Index was up 0.18 percent, or 14.59 points to 8242.28.

Chinese Premier Wen Jiabao announced at the opening of the parliament's annual session on Thursday morning a 950 billion yuan (139.1 billion U.S. dollars) deficit budget, which was close to 3 percent of the country's gross domestic product (GDP).

The deficit budget is nearly three-fold of the previous record high deficit, which is 319.8 billion yuan in 2003, but economists said it remained an expansion in a safe range and it would be necessary to spend even more if the country's economic growth further weakened in the second quarter of this year.

The total fiscal deficit in 2008 was only 180 billion yuan.

The combined turnover of the Shanghai and Shenzhen bourses surged to 231.1 billion yuan from 195.75 billion yuan on Wednesday.

Gains led losses by 571 to 347 in Shanghai and 473 to 307 in Shenzhen.

Source: Xinhua