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China's stimulus package plan not fully understood

BEIJING -- Premier Wen Jiabao said here Friday that China's stimulus package plan was not fully understood by the world.

"Rumors and misunderstanding set the world stock market on a roller coaster ride," Wen told reporters after the National People's Congress closed its annual session.

China has announced a 4 trillion-yuan (585 billion U.S. dollars) two-year economic stimulus package to boost growth and domestic demand, 1.18 trillion yuan of which will be funded by the central government.

The stimulus package plan include four major components, including large-scale government spending, industrial restructuring and rejuvenation, scientific research and social safety net.

Wen said large-scale government spending is the most direct, powerful and effective measure (to boost domestic consumption) and the 1.18 trillion yuan from the central government is new investment.

Wen said the 1.18 trillion-yuan central government investment include projects concerning people's wellbeing, technology upgrading, environmental protection and major infrastructure projects.

Other projects, including the 600 billion-yuan tax cut, old-age pension increase for enterprise retirees, salary increase to 12 million teachers, subsidies to farmers as well as an 850 billion-yuan three-year investment in health care reform were not included in the 4 trillion-yuan stimulus package, Wen said.

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