The safety line was not a universal standard and could vary in different countries, said Vivek Arora, International Monetary Fund Senior Resident Representative in China.

However, by running prudent and careful fiscal policy in previous years -- reflected in low deficits and debt -- China has created fiscal space that it can now use to fight the downturn, said Arora.

"In this sense, China is in a relatively strong position," he told Xinhua.

The surging deficit is part of China's proactive fiscal policy, which was adopted in November in response to a slowing economy and diminishing jobs under the pressure of the world financial turmoil.

"We will significantly increase government spending," said Wen. "This is the most active, direct and efficient way we can expand domestic demand."

Wen also attributed the large deficit to decline in government revenues as a result of slower economic growth and reduction of tax burdens on enterprises and individuals.

China's GDP slowed to a seven-year low of 9 percent year on year in 2008 as the global financial crisis took a toll on the world's fastest-expanding economy.

A comprehensive implementation of the value-added tax (VAT) reform will cut the burdens on enterprises and individuals by approximately 500 billion yuan this year, as preliminary calculations indicate, he said.

A variety of means such as tax cuts, rebates and exemptions will be adopted to encourage enterprise investment and consumer spending and invigorate the micro-economy.

Altogether 100 administrative charges will be rescinded or suspended this year, said Wen.

He noted while continuing to increase investment in key areas, the government will "strictly control regular expenditures and do everything we can to reduce administrative costs."

(Xinhua News Agency March 5, 2009)