The policy next year will strive to curb "excessive development" in overheated industries, while boosting support for farmers, Lou told a seminar in Beijing, according to Xinhua news agency.

The Chinese government has spent most of 2004 trying to reduce the flow of money into red-hot sectors such as real estate, auto manufacturing and steel, most recently resorting to the first interest rate hike in nine years.

Chinese spending on fixed assets -- a key measure for the country's investment fever -- soared 27.5 percent in the first nine months of the year.

The government expects a budget deficit of 319.8 billion yuan (38.5 billion dollars) this year, unchanged from the record deficit of 2003.

Observers have said China's deficit is still manageable, but that the government will end up in severe fiscal trouble if it does not eventually get it under control.

Zhu Zhixin, vice head of the State Development and Reform Commission, told the same seminar that the government would try to provide more assistance to the poorest members of society next year, according to Xinhua.

However, he said China would have "some difficulty" in raising the income of the country's 800 million farmers next year.