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China boosts defence spending to $14.7bn

HONG KONG: China has set aside 120.5 billion yuan (US$14.7 billion) for defence spending in 2000, up 12.7 percent from 1999, the South China Morning Post reported on Saturday.

To boost the economy, the Chinese government would increase total expenditure by 12.3 percent over 1999 to 920.3 billion yuan, and incur a record budget deficit of 229.9 billion yuan, the newspaper reported.

Premier Zhu Rongji, who will address the National People's Congress on Sunday, when an annual two-week parliamentary sitting begins, will call for a "no-holds-barred war on corruption", it said.

Citing Zhu's 10-section government work report, the newspaper said the premier will also say Beijing will not "sit idle" if Taipei keeps dragging its feet on reunification.

However, Zhu will steer "clear of rhetoric used by hardliners such as 'waging a military struggle' against Taiwan", it said.

China issued a policy "white paper" last week setting out three scenarios under which China could use force against Taiwan -- if the island declared independence, if it was invaded by a foreign power, or if it dragged its heels indefinitely on reunification.

In recent years China had only stressed the first two scenarios, and the policy statement shocked Taiwan and the U.S. government, which saw it as an attempt by Beijing to influence the outcome of Taiwan presidential elections in March.

Taiwan has been estranged from the mainland since 1949, when Chiang Kai-shek's Nationalist government fled to the island after being defeated by Mao Zedong's Red Army-Reuters