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UPDATE 1-China to boost spending for COVID prevention, treatment

(Adds details, context)

BEIJING, Jan 16 (Reuters) - China's finance ministry said on Monday it will boost funding for COVID-19 prevention and control, urging local fiscal departments to step up transfer payments to rural and poor areas, it said in a statement.

The world's second-largest economy has seen a surge in COVID infections after Beijing abruptly removed stringent anti-virus curbs last month. Authorities said on Saturday nearly 60,000 people with COVID have died in hospitals between Dec. 8 and Jan. 12.

The funding should be mainly used for treatment, temporary work allowance for medical staff, vaccinations and improving medical treatment capabilities, said the statement.

China will also support the use of local government bonds and the issuance of special local government bonds for building qualified health care projects, in a bid to meet the needs of public medical treatment, it said.

Resource coordination of first-aid in the countryside should be done well, and medical treatment of patients with severe conditions must also be prepared, the statement added.

The country will set up "green channels" for the government, which will facilitate the purchase of medical supplies, vowing "COVID prevention and control must not be affected by funding issues," said the statement.

In 2022, declining state land sales revenue amid an ongoing crackdown on debt in the sector severely eroded local governments' financial power - a situation exacerbated also by China's feeble growth, weak tax income and crippling COVID restrictions.

Gross domestic product (GDP) likely grew just 2.8% in 2022 as lockdowns weighed on activity and confidence, according to a Reuters poll, slower than a 3.2% rise seen in October's forecast and braking sharply from 8.4% growth in 2021.

The government is due to release the GDP data, along with December activity data, on Tuesday at 0200 GMT. (Reporting by Ellen Zhang and Ryan Woo; Editing by Toby Chopra and Bernadette Baum)

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