Home » Business » Biz Commentary
China moves faster in approving infrastructure projects
By Tony Tsang |
May 25, 2012, Friday
|
Print Edition
Print Edition
AS reported in JRJ.com, the central government has requested local governments to report their all infrastructure project investment for this year before end-June for faster appraisal and approval, and related central government subsidies for these projects will likely be appropriated earlier than expected.
This likely represents the central government's endeavor to boost the slowing economy, which highly depends on real estate fixed-asset investment. China's commodity property FAI growth fell from the peak of 63 percent in November 2010 to 9 percent in April 2012.
As reported by the China Securities Journal, since end-February, China has tremendously accelerated the appraisal and approval process for major infrastructure projects, such as highway networks, airport and railway lines. For example, the airport projects in Fuyuan of Heilongjiang, Shihezi of Xinjiang, Qingyang of Gansu and Jiangbei of Chongqing have recently received approval from the National Development and Reform Commission.
Observers said these are strong evidence of infrastructure FAI acceleration, adding that the central government's focus should be relaunching and completing the suspended major projects, most of which are in central/western China and some of them were suspended since last August.
Earlier, the central government also said to allocate more capital for the development of social housing, with the Ministry of Finance and Ministry of Housing and Urban-Rural Development jointly allocated 10.5 billion yuan (US$1.67 billion) subsidy for low-rental housing projects, of which Eastern China accounts for 5.1 percent (540 million yuan), Central China accounts for 40.2 percent (4.22 billion yuan), and Western China accounts for 40.2 percent (4.22 billion yuan). This amount can also be used for public rental housing if the needs for low-rental housing have be satisfied.
In our view, the implications of these are: 1) With signs of a slowing economy, there will be more government stimulus; 2) Government's economic stimulus would focus more on infrastructure investment and social housing; 3) Basic tone of government tightening on the property market would remain unchanged with housing purchase restrictions to continue; and 4) There, however, would be more support on mortgages to first-time homebuyers and genuine upgraders. We believe that companies focus on infrastructure and social housing would benefit directly.
This likely represents the central government's endeavor to boost the slowing economy, which highly depends on real estate fixed-asset investment. China's commodity property FAI growth fell from the peak of 63 percent in November 2010 to 9 percent in April 2012.
As reported by the China Securities Journal, since end-February, China has tremendously accelerated the appraisal and approval process for major infrastructure projects, such as highway networks, airport and railway lines. For example, the airport projects in Fuyuan of Heilongjiang, Shihezi of Xinjiang, Qingyang of Gansu and Jiangbei of Chongqing have recently received approval from the National Development and Reform Commission.
Observers said these are strong evidence of infrastructure FAI acceleration, adding that the central government's focus should be relaunching and completing the suspended major projects, most of which are in central/western China and some of them were suspended since last August.
Earlier, the central government also said to allocate more capital for the development of social housing, with the Ministry of Finance and Ministry of Housing and Urban-Rural Development jointly allocated 10.5 billion yuan (US$1.67 billion) subsidy for low-rental housing projects, of which Eastern China accounts for 5.1 percent (540 million yuan), Central China accounts for 40.2 percent (4.22 billion yuan), and Western China accounts for 40.2 percent (4.22 billion yuan). This amount can also be used for public rental housing if the needs for low-rental housing have be satisfied.
In our view, the implications of these are: 1) With signs of a slowing economy, there will be more government stimulus; 2) Government's economic stimulus would focus more on infrastructure investment and social housing; 3) Basic tone of government tightening on the property market would remain unchanged with housing purchase restrictions to continue; and 4) There, however, would be more support on mortgages to first-time homebuyers and genuine upgraders. We believe that companies focus on infrastructure and social housing would benefit directly.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
