China fears it may not balance budget

New fears have emerged about the depth of the financial crisis in China with Beijing today saying it would struggle to stop a budget blow-out this year.

China faces "very severe" international and domestic economic conditions and officials must make sure they spend funds efficiently, Finance Minister Xie Xuren said today.

Analysts say China's budget deficit may rise to 500 billion yuan (£53 billion) in 2009 from a government forecast of 180 billion yuan. "Maintaining stable and relatively fast growth is increasingly difficult, and the tense conflict between spending and revenue will become more prominent," Xie said.

An increasing chorus of analysts are concerned that the scale of the slowdown in China threatens to destabilise the government and cause immense social upheavals.

The government may announce more spending on top of the four trillion yuan ($586 billion) stimulus published in November, Premier Wen Jiabao has said.