''The Chancellor will not want any embarrassing over-runs as the Budget approaches. The question is how realistic he will make his spending plans for future years.''Analysts fully expect Mr Clarke to announce tax cuts worth between pounds 3bn and pounds 5bn in November despite his protestations that he will not cut them if he cannot afford it. Although a recovery in spending did not help Labour hang on to power in 1979, each subsequent election has been preceded by faster expenditure growth, as the chart above shows.Departmental outlays last month were 7.5 per cent higher than a year earlier. Although spending at a faster rate does not guarantee winning an election, cutting its growth seems to guarantee losing one.The last time growth in government spending fell sharply in the years before a general election was in 1973 and 1974, before Edward Heath's government lost office. Brian Mawhinney, the Conservative party chairman, seized on the leak to claim that Labour wanted to "slap a tax demand on Britain's car owners".Robin Cook, Labour's foreign affairs spokesman, who chairs the policy forum, denied that owners of large cars would pay more tax "No, I did not say that. We have made a specific commitment that within vehicle excise duty we will look at ways in which to reward those people who were going to use more efficient cars," he told BBC Radio 4's Today programme yesterday.Clare Short, the party's transport spokeswoman, said: "It is wrong to say that Labour is planning to increase taxes on cars It is the Government who have raised taxes on motorists. The Treasury said it was too early in the financial year to draw any conclusions.

But for the Chancellor to meet his pounds 22.4bn target for the 1996/97 year, the monthly borrowing requirement needs to be pounds 800m a month lower than last year on average.''The risks of overshooting are now on the spending side,'' said Adam Cole, an economist at James Capel.Many City economists are sceptical that Mr Clarke will be able to stick to his tough spending target given the tendency of expenditure to climb sharply in the run-up to a general election. Meanwhile, work has begun on a plant in Shanghai which will more than triple production.The general manager, Lee Weng, who is from Malaysia, says the potential remains enormous "Nobody knows how big the market is. We've just got no idea." China's 1.2 billion people are more than the combined populations of the EU, Russia, and the United States.In short: gold fever. For the moment, both the British and the Chinese are pleased. But it is trickier to quantify the political fallout of greater commercial involvement.China is still a repressive regime Freedom of speech is non-existent.