THE Government's budget deficits and debts have reached an alarming level and Beijing should recognise the potential risks to the economy, an official magazine reports. In a rare criticism of the country's financial situation, the Communist Party's Outlook magazine said the Government's deficits and debts were way above all safety levels by international standards. The magazine quoted Finance Minister Liu Zhongli as saying at the National People's Congress earlier this month that the Government would have a budget deficit of 57 billion yuan (HK$53.23 billion), a cut of four billion yuan from last year's figure. Mr Liu also stressed that Beijing had already done a hard job in achieving such a deficit cut. However, the magazine said Government deficits of about 60 billion yuan and accumulated debts of more than 200 billion yuan were 'threatening'. 'Apparently, the [budget] deficits are no longer posted intentionally [by the Government] to stimulate the economy,' the magazine noted, hinting that the state's finances might be out of control. It said the deficits, with accumulated loans, had far exceeded the two internationally recognised safety levels. Firstly, the deficits and debts far exceeded the 'alarm level' of three per cent of Gross National Product for 1994 and 1995. Secondly, it was internationally agreed that the budget deficits of a government reached an alarming level if they were 15 per cent of its annual total expenditure. The deficits would be considered 'vicious and posting great potential risks for the national economy' if the percentage was above 15 per cent, the magazine said. It said the figures for China were 25 per cent in 1993 and 40 per cent in 1994, more than 150 per cent above the alarm level. The magazine concluded that China's budget deficits were too high by any standards and deserved full attention for their potential threats to the economy.