China announced on Thursday a fiscal deficit budget of 950 billion yuan (US$139 billion) for 2009, a record high in six decades, as the country boosts spending to cushion the impact of the global financial crisis.

The total deficit accounts for less than 3 percent of China's gross domestic product (GDP), said Chinese Premier Wen Jiabao at the opening of the parliament's annual session.

Despite the deficit surge, China's constant deficit drops in previous years provide room to issue more bonds this year, said Wen when delivering the government work report.

"The ratio of the cumulative balance of outstanding government bonds to GDP, which is around 20 percent, is within the acceptable range of what our overall national strength can bear and is therefore safe," he told the country's legislators.

China set this year's central government deficit at 750 billion yuan, 570 billion yuan more than last year, he said.

In addition, the State Council, or Cabinet, will allow local governments to issue 200 billion yuan worth of government bonds through the Ministry of Finance (MOF), which will go into provincial budgets, said Wen.

The total 950 billion-yuan deficit budget was nearly three times China's last record high deficit, which was 319.8 billion yuan in 2003.

"It remains an expansion in the safe range," said Jia Kang, president of the MOF Institute of Fiscal Science.

It will be necessary to spend even more if China's economic growth further weakens in the second quarter of this year, said Jia, adding that the government still has room to do that.

The MOF figures show China's deficit-GDP ratio saw consecutive drops to 0.6 percent last year from 2.6 percent in 2002, as the government's pockets bulged on a double-digit economic growth.

A country's fiscal conditions will be viewed as risky if the deficit accounts for more than 3 percent of GDP or the outstanding government bonds exceed 60 percent of GDP, according to the usual international practice.