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More infrastructure projects in pipeline to battle slowdown
Source: Bloomberg News |
September 18, 2012, Tuesday
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Print Edition
Print Edition
CHINA is building more subways, highways and sewage plants to counter a growth slowdown, a senior Chinese economic planning official said yesterday.
Xu Lin, head of the planning department at the National Development and Reform Commission, said in Beijing that newly approved projects, including roads and subways in 18 Chinese cities, were only a part of a pipeline of infrastructure projects being developed in the nation.
"In an economic slowdown, the government has to take some counter-cyclical measures - it's absolutely normal, and it's part of macro-economic control," Xu said at an academic forum in Peking University. "China still has large demand for infrastructure projects."
Premier Wen Jiabao, who pledged last week to employ monetary and fiscal policies to spur growth, has increased infrastructure spending and refrained from introducing another stimulus package, with fiscal support limited to tax cuts and accelerated project approval. The economy grew 7.6 percent in the second quarter from a year earlier, the smallest increase since March 2009.
Xu's comments come after the NDRC this month published approvals for building 2,018 kilometers of roads and subway projects across the country. Nomura Holdings Inc estimated the total value of projects approved at about 1 trillion yuan (US$158 billion). The NDRC has also approved railroads, sewage-treatment plants, ports and warehouses.
At least 12 banks and brokerages have cut their gross domestic product forecasts so far this month, with UBS AG, Morgan Stanley and Barclays Plc now predicting the nation's growth will sink to a 22-year low of 7.5 percent this year.
Xu said the accelerated project approval did not mean the government is rolling out more stimulus. "These projects are already in our plan," Xu said.
A 4 trillion yuan package of state spending and tax cuts in 2008 stoked inflation and sparked concern local governments took on more debt than they can afford.
Xu Lin, head of the planning department at the National Development and Reform Commission, said in Beijing that newly approved projects, including roads and subways in 18 Chinese cities, were only a part of a pipeline of infrastructure projects being developed in the nation.
"In an economic slowdown, the government has to take some counter-cyclical measures - it's absolutely normal, and it's part of macro-economic control," Xu said at an academic forum in Peking University. "China still has large demand for infrastructure projects."
Premier Wen Jiabao, who pledged last week to employ monetary and fiscal policies to spur growth, has increased infrastructure spending and refrained from introducing another stimulus package, with fiscal support limited to tax cuts and accelerated project approval. The economy grew 7.6 percent in the second quarter from a year earlier, the smallest increase since March 2009.
Xu's comments come after the NDRC this month published approvals for building 2,018 kilometers of roads and subway projects across the country. Nomura Holdings Inc estimated the total value of projects approved at about 1 trillion yuan (US$158 billion). The NDRC has also approved railroads, sewage-treatment plants, ports and warehouses.
At least 12 banks and brokerages have cut their gross domestic product forecasts so far this month, with UBS AG, Morgan Stanley and Barclays Plc now predicting the nation's growth will sink to a 22-year low of 7.5 percent this year.
Xu said the accelerated project approval did not mean the government is rolling out more stimulus. "These projects are already in our plan," Xu said.
A 4 trillion yuan package of state spending and tax cuts in 2008 stoked inflation and sparked concern local governments took on more debt than they can afford.
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