Changsha unveils ambitious stimulus plan
Source: Bloomberg News |
July 27, 2012, Friday
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Print Edition
Print Edition
CHANGSHA City has unveiled an 829.2 billion yuan (US$130 billion) investment plan, joining other Chinese cities seeking to shore up local economies as national growth slows.
Changsha, capital of central China's Hunan Province, is wooing banks to finance 195 projects, which include an airport and subway lines and will take several years to complete, China News Service reported yesterday.
Local governments are stepping up efforts to bolster the economy, with the cities of Nanjing and Ningbo saying over the last two weeks that they will introduce measures, including tax cuts and incentives to boost consumption. Premier Wen Jiabao has said that promoting investment is the key to stabilizing China's growth, which has slowed for six quarters.
"We expect Changsha, Nanjing and Ningbo to be the start of a wave of nationwide stimulus packages, with more announcements from other local governments to come," Shen Jianguang, Hong Kong-based chief Asia economist for Mizuho Securities Asia Ltd, said in a note yesterday. "With the central government's tight controls on local government lending previously, there has been widespread panic among local governments with regard to the recent downturn."
Changsha's plan "will be spread over the next few years and eventually the actual amount of investment recorded could be discounted to a third of its original target," said Shen, who previously worked for the International Monetary Fund.
Guizhou, in southwest China, is considering more than 2,300 projects involving total investment of 3 trillion yuan related to eco-tourism, according to a July 24 statement on the provincial government's website.
Growth in China's central and western regions is outpacing eastern areas as companies shift production inland to take advantage of lower costs. The State Council, China's Cabinet, on Wednesday approved a plan to promote development in six central provinces, including Hunan, according to Xinhua news agency.
Nanjing, capital of Jiangsu, announced on July 23 a "30-point" plan to increase consumption, including incentives for automobile purchases and loans for affordable-housing construction. Ningbo, a port city in Zhejiang, will implement 24 stimulus measures, including a fund to support small businesses, the Ningbo Daily reported on July 17.
Changsha, capital of central China's Hunan Province, is wooing banks to finance 195 projects, which include an airport and subway lines and will take several years to complete, China News Service reported yesterday.
Local governments are stepping up efforts to bolster the economy, with the cities of Nanjing and Ningbo saying over the last two weeks that they will introduce measures, including tax cuts and incentives to boost consumption. Premier Wen Jiabao has said that promoting investment is the key to stabilizing China's growth, which has slowed for six quarters.
"We expect Changsha, Nanjing and Ningbo to be the start of a wave of nationwide stimulus packages, with more announcements from other local governments to come," Shen Jianguang, Hong Kong-based chief Asia economist for Mizuho Securities Asia Ltd, said in a note yesterday. "With the central government's tight controls on local government lending previously, there has been widespread panic among local governments with regard to the recent downturn."
Changsha's plan "will be spread over the next few years and eventually the actual amount of investment recorded could be discounted to a third of its original target," said Shen, who previously worked for the International Monetary Fund.
Guizhou, in southwest China, is considering more than 2,300 projects involving total investment of 3 trillion yuan related to eco-tourism, according to a July 24 statement on the provincial government's website.
Growth in China's central and western regions is outpacing eastern areas as companies shift production inland to take advantage of lower costs. The State Council, China's Cabinet, on Wednesday approved a plan to promote development in six central provinces, including Hunan, according to Xinhua news agency.
Nanjing, capital of Jiangsu, announced on July 23 a "30-point" plan to increase consumption, including incentives for automobile purchases and loans for affordable-housing construction. Ningbo, a port city in Zhejiang, will implement 24 stimulus measures, including a fund to support small businesses, the Ningbo Daily reported on July 17.
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