China ruled out
introducing a stimulus to arrest the slowdown of the economy but instead
announced USD 260 billion worth of infrastructure projects, including railway
construction, to spur growth.
China is to invest more than CNY 1.6 trillion in
infrastructure in an economy where growth is expected to slow and fiscal
deficit increase, according to the work report submitted by Premier Mr Li
Keqiang to the legislature, the National People's Congress currently under
session.
Mr Li said that China will invest over CNY 800
billion in railway construction this year while investment in major water
conservancy projects will exceed CNY 800 billion. China will increase effective
investment in public services.
He said that over 8,000 km of railway track will
be opened to traffic this year and construction on the 57 ongoing major water
conservancy projects must be accelerated, adding that 27 more projects will
start this year.
He added that China already has 16,000 km of
high speed tracks, which amounts to 60% world total.
Mr Xu Shaoshi, minister in charge of the
National Development and Reform Commission, China's planning body said that
China has no plans to introduce any stimulus but underlined importance of
investments, which he believes continues playing a key role in promoting
Chinese economy. Mr Shaoshi said that “We need to encourage multi-pronged
investment and increase investment efficiency. More investment will be made to
increase the supply of public products and services, ranging from information
technology and electricity to railway and water conservancy projects, in the
world's second largest economy that is still lagging behind industrialised
countries in infrastructure construction.”
China wants to avoid economic growth based on
investments and instead looks to have a consumption driven growth rate.
Speculation about a stimulus was rife as China
announced a USD 570 billion stimulus package in 2008 to revive the economy
following the global economic crisis.
China lowered the growth target of the gross
domestic product by half a percentage to around seven per cent for 2015, after
the economy registered 7.4% expansion last year, the lowest in 24 years.
Source – PTI