CHINA

China May Eliminate Subsidies: China may free up grain prices and eliminate other state subsidies to control the ballooning deficit, Finance Minister Liu Zhongli said in his first public remarks since assuming office. “To rid the government of subsidies will contribute not only to a balanced budget but also to the readjustment of the economic structure,” Liu said. Despite China’s rapid economic growth over the last decade under Deng Xiaoping, its budget deficit has ballooned due to money-draining subsidies and state-run enterprises. For several commodities like grain, the government must reduce heavy subsidies to narrow the big gap between purchasing and selling prices. Liu’s remarks coincide with a vague directive Friday by China’s State Council, or cabinet, to “leave agricultural products to market forces and shift the attention from output to quality and efficiency in developing agriculture,” the news service Xinhua reported.