China's fiscal capacity is strong enough to fend off any debt risks, Finance Minister Jin Renqing said in Beijing yesterday.

"The fiscal situation, although has a certain amount in deficits, is normal and relatively good,'' Jin said in an interview.

As the government has decided to continue its pro-active fiscal policies into the near future, deficits will not drop by a big margin, he said.

But due to the continuous growth in both the economy and revenues, the ratio of debts to the gross domestic product and revenues will drop, he said.

"The government won't have any debt risks,'' he said.

The Chinese economy is in the rising period of a new economic cycle, Jin said.

China will continue to carry out a pro-active fiscal policy in the near future, but the focus of the policy will be shifted from stimulating economy to supporting sustainable development.

"It was a correct and necessary decision to readjust the economic and fiscal policies while maintaining the continuity of the policies,'' Jin said.

The government would channel more treasury-bond funds to the construction of infrastructure in rural areas, public health facilities, and environmental protection and water conservancy projects, he said.

It would also give key attention on funding development of the western areas of the country, rejuvenation of old industrial bases in Northeast China and large-scale construction projects such as the Qinghai-Tibet railway, he said.

China has adopted a pro-active fiscal policy in 1998, and successfully maintained rapid economic growth by expanding domestic demand with government investment.

After years of reform and development, the Chinese Government has accumulated a huge amount of money that can be used to secure inclusive, balanced and sustainable development of its society and the economy.

He said the government should make better use of the funds gathered by issuing treasury bonds, so as to improve economic returns from government investments.

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