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Incomes and infrastructure targeted

CHINA will spend 3 trillion yuan improving incomes and infrastructure and 1 trillion yuan rebuilding earthquake-hit regions, the country's top planning body said today.

The government will study how the existing 4-trillion-yuan package is working and then decide whether to introduce more measures, said Zhang Ping, director of the National Development and Reform Commission.

The 4-trillion-yuan will go to seven sectors - 1.5 trillion yuan in infrastructure, 1 trillion yuan in reconstructing quake-hit areas, 400 billion yuan in affordable housing schemes, 370 billion yuan in improving rural living standards, 370 billion yuan in technology reforms, 210 billion yuan in energy saving projects and 150 billion yuan in health and education.

"The funds will not be channeled to redundant projects and general processing industries," Zhang said.

The central government will provide 1.18 trillion yuan in the package and other funds will come from local government, policy loans and corporate bonds, he said.

Chinese companies have collected 130 billion yuan by issuing 45 bonds since the fourth quarter of last year and another 50 companies have lined up for regulator approval to issue 100-billion-yuan in corporate bonds, Zhang said.

"The funds will be spent in road and power grid construction projects which will have returns in the future," Zhang said.

The NDRC, the Ministry of Finance, the central bank and the bank watchdog have a plan to grant policy-related loans with a longer maturity and lower interest rates to fund some projects.

The State Council will also let local governments issue 200 billion yuan worth of government bonds through the Ministry of Finance, which will go into provincial budgets.

"We also welcome public investments in profitable projects such as railways and technology innovation," he said.


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