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The Ministry of Finance has pledged to adopt a prudent fiscal policy to help cool the economy and prevent excessive price rises.

The authorities will also make efforts to improve people’s well-being by supporting such sectors as social security, health, education and housing, Xie Xuren, minister of finance, told a meeting yesterday in Beijing.

The country will “properly” reduce the budget deficit, he said. Last year, the central government deficit was 274.9 billion yuan (37.3 billion U.S. dollars), or 1.37 percent of gross domestic product. It is budgeted to drop to 1.1 percent this year.

The issuance of long-term construction bonds will be cut, which will help the central government’s drive to prevent the economy from overheating and rising prices from evolving into entrenched inflation - a platform hammered out at the Central Economic Work Conference held earlier this month, Xie told heads of the nation’s local fiscal departments.

The government started to issue long-term construction bonds, or bonds for large-scale infrastructure projects, in the wake of the 1997-98 Asian financial crisis to sustain economic growth.

But with the economy growing briskly in recent years - and even facing the risk of overheating - the central government has gradually cut the scale of such bonds to avoid jazzing up already-fast investment growth.

As a result, the issuance of such bonds has been cut from 150 billion yuan (20.4 billion U.S. dollars) in 2002 to 60 billion yuan (8.1 billion U.S. dollars) last year.

Xie vowed to further use fiscal policy to stabilize rising prices.

“(We) will actively support production of agricultural products such as grain, edible oil and meat, and ensure the supply of basic daily necessities to curb excessive price rises.”

Subsidies will be extended to those hit hard by rising prices timely, he added.

The consumer price index, a key gauge of inflation, rose to a decade high of 6.9 percent in November, the fourth consecutive month when it exceeded 6 percent.

Xie said more funds would be pumped into the health sector, and the rural cooperative medical insurance system, which now covers 730 million farmers in 86 percent of all counties nationwide, would be expanded.

In the first 11 months, the central and local fiscal expenditure on health amounted to 142 billion yuan (19.3 billion U.S. dollars), up 40.6 percent year on year, Xie said.

Fiscal revenue grew by 33.5 percent year-on-year in the first 11 months to reach 4.8 trillion yuan (651 billion U.S. dollars) and is expected to hit 5.1 trillion yuan (689 billion U.S. dollars) for the whole year, 31 percent more than in 2006, the finance minister said.

Expenditure in education increased by 32.7 percent during the January-November period, while social security and employment expenditure grew by 28.6 percent.

The European Union (EU) expressed its welcome on Wednesday to the announcement by President Barack Obama that the United States will further reinforce its engagement in Afghanistan.

“This announcement comes at a time of renewed focus and engagement by the international community as a whole. The European Union stands ready to work closely with the United States and other parts of the international community in addressing the challenges in Afghanistan,” Sweden, the current rotating presidency of EU, said in a statement.

The 27-nation bloc reiterated its strategic partnership with the United States in the region.

It further stressed the importance of close and strategic coordination of the international efforts, under the lead of the United Nations Assistance Mission in Afghanistan.

The EU remains determined to enhance and improve its engagement in Afghanistan in accordance with the Plan for Strengthened EU Action in Afghanistan and Pakistan, adopted by the Council of the European Union on 27 October 2009, the statement added.

After months of review, the Obama administration on Tuesday renewed its strategy for Afghanistan by sending 30,000 additional troops to the country in a decisive war against the al-Qaida network and extremists.

Stock futures continued to trade in a narrow range Wednesday after a private group’s report showed job cuts declined in November for the eighth straight month, but not as much as forecast.

The Federal Reserve’s assessment of regional economic activity is also set to be released in the afternoon, providing further insight into a potential recovery.

Overseas markets were mixed.

In the first of three straight days of employment reports, the ADP National Employment Report says 169,000 private sector jobs were lost in November, worse than the 160,000 cuts expected by economists polled by Thomson Reuters.

The eighth straight decline in job losses provides further evidence the country’s economy is recovering, but at a slow pace. ADP said 195,000 jobs were lost in October. A stabilization in job losses and eventual rehiring of workers is considered vital to a continued recovery.

Joel Prakken, chairman of Macroeconomic Advisers, which partners with ADP to compile the data, said in a statement that losses are “likely to decline for at least a few more months” as employment usually lags a recovery in economic activity.

The ADP jobs report is often used as a gauge for Friday’s monthly unemployment report from the Labor Department. Economists expect the unemployment rate remained flat at 10.2 percent last month.

Data on weekly jobless claims is due out Thursday.

Ahead of the opening bell, Dow Jones industrial average futures fell 3, or less than 0.1 percent, to 10,458. Standard & Poor’s 500 index futures fell 0.20, or less than 0.1 percent, to 1,108.20, while Nasdaq 100 index futures rose 0.25, or less than 0.1 percent, to 1,792.25.

Investors hunting for further signs of a rebound will review the Fed’s beige book report, which is due out at 2 p.m. EST. The report breaks down economic activity by region.

Stocks surged on Tuesday, resuming their upward climb that was temporarily halted by debt concerns in Dubai. The months-long pattern of a weakening dollar pushing commodities prices, as well as energy and materials stocks, higher continued.

New economic data remained mixed, but indicated signs of modest improvement. A report on manufacturing showed the sector expanded in November at a slower pace than the previous month, but new orders were picking up. That signals expansion is likely in the coming months.

The Dow and S&P both gained 1.2 percent, while the Nasdaq composite index jumped 1.5 percent.

On Wednesday, the dollar modestly declined against most major currencies, while gold prices rose, again touching a new high. Gold, which is trading at $1,210.80 an ounce, rose as high as $1,218.40 an ounce in earlier dealings.

Meanwhile, bond prices were little changed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.30 percent from 3.29 percent late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.06 percent from 0.04 percent.

Overseas, Japan’s Nikkei stock average rose 0.4 percent. In afternoon trading in Europe, Britain’s FTSE 100 slipped 0.1 percent, Germany’s DAX index rose 0.1 percent, and France’s CAC-40 gained 0.1 percent.