Railway spending will increase
Source: Bloomberg News |
July 31, 2012, Tuesday
|
Print Edition
Print Edition
CHINA has increased planned 2012 spending on railway infrastructure for the second time this month as the government steps up investment to bolster the slowest economic growth in three years.
The Ministry of Railways, the nation's largest corporate debt issuer, plans to spend 470 billion yuan (US$74 billion) on railroads and bridges this year, a bond prospectus showed yesterday.
That's 4.8 percent higher than a ministry figure cited in a July 6 statement by the Anhui provincial economic planning agency, which indicated a 9 percent increase from a previous number.
The new target exceeds last year's 461 billion yuan in spending and follows Premier Wen Jiabao's comments that promoting investment growth is the key now to stabilizing an expansion that decelerated to 7.6 percent last quarter. At the same time, Chinese officials are signaling the slowdown isn't deep enough to warrant a return to the 700 billion yuan in railway-construction funds in 2010.
"China is selectively upscaling the stimulus," said Lu Zhengwei, the chief economist with the Industrial Bank in Shanghai. "Premier Wen Jiabao said China will do something to boost confidence, and this is fresh evidence."
Economic growth hit bottom in the second quarter and will probably rebound to 7.8 percent in the third quarter, Lu said.
The railways ministry will sell 22 billion yuan in 10-year bonds and 5 billion yuan in 15-year bonds, according to the prospectus posted to the Chinese government's bond clearinghouse website yesterday.
The ministry didn't elaborate on the 470 billion yuan number in the document for railway infrastructure spending.
Railway infrastructure spending is a gauge of the government's determination to stimulate growth.
The Ministry of Railways, the nation's largest corporate debt issuer, plans to spend 470 billion yuan (US$74 billion) on railroads and bridges this year, a bond prospectus showed yesterday.
That's 4.8 percent higher than a ministry figure cited in a July 6 statement by the Anhui provincial economic planning agency, which indicated a 9 percent increase from a previous number.
The new target exceeds last year's 461 billion yuan in spending and follows Premier Wen Jiabao's comments that promoting investment growth is the key now to stabilizing an expansion that decelerated to 7.6 percent last quarter. At the same time, Chinese officials are signaling the slowdown isn't deep enough to warrant a return to the 700 billion yuan in railway-construction funds in 2010.
"China is selectively upscaling the stimulus," said Lu Zhengwei, the chief economist with the Industrial Bank in Shanghai. "Premier Wen Jiabao said China will do something to boost confidence, and this is fresh evidence."
Economic growth hit bottom in the second quarter and will probably rebound to 7.8 percent in the third quarter, Lu said.
The railways ministry will sell 22 billion yuan in 10-year bonds and 5 billion yuan in 15-year bonds, according to the prospectus posted to the Chinese government's bond clearinghouse website yesterday.
The ministry didn't elaborate on the 470 billion yuan number in the document for railway infrastructure spending.
Railway infrastructure spending is a gauge of the government's determination to stimulate growth.
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