China Business News reported that Chinese transport ministry is considering a plan to spend CNY 5 trillion on road and port infrastructure projects over the next three to five years, in a bid to stimulate domestic demand.
The report cited a ministry source as saying that the massive spending was being considered as such investment can produce an immediate effect."
It is said that the CNY 5 trillion figure includes funds the government had already earmarked for highway construction projects. About CNY 140 billion will be spent on roads each year during the 11th Five Year Plan period, and CNY 100 billion a year during the 12th Five Year Plan period. The investment is part of the government"s target to have 95% of all towns and 80% of all villages linked by a national road network by the end of 2020.
The source was quoted as saying that if the State Council approves the extra spending the targets can be achieved earlier than expected.
Mr Ke Linchun spokesman of Transport ministry said recently that although additional spending on infrastructure is being considered, the size of the investment has yet to be agreed. He said that "the total amount has not been decided."
According to media reports, industry experts have hailed the news, saying large scale spending on infrastructure is needed to stimulate domestic demand. The government made similarly large investments in the years following the 1998 Asian financial crisis to counter the effects of the regional slump.
Mr Zhang Wenjie, a professor at Beijing Jiaotong University, said recently that while he welcomed the extra spending on highway projects, a more pressing requirement was the development of the nation"s ports and docks. He said that "this area deserves a much larger proportion of the spending, as we still lag a long way behind developed countries in terms of numbers."
As well as the proposed new investment, on October 24th, the State Council approved CNY 2 trillion for the construction of a series of railway projects to help boost economic growth amid the worldwide financial crisis. As well as creating jobs in construction, the projects will be good news for the nation"s steel and cement industries.