Provincial projects up China stimulus by $1.5 trillion

AGENCIES
Posted on 2008-11-24
BEIJING- Projects planned by provincial governments will add an additional 10 trillion yuan ($1.464 trillion) to the value of China’s economic stimulus package, state television said on Sunday, even as the country’s premier called on businesses to keep up their confidence. The central government earlier this month announced a 4 trillion yuan stimulus package, including rail and infrastructure projects as well as increased social spending, as China strives to offset a sharp drop in demand for the exports which fuel its economy.
The People’s Bank of China will need to pay more attention to the structural adjustment of the economy, as it combats the impact of the global financial crisis, governor Zhou Xiaochuan said in remarks published on the central bank’s website Sunday. He called for ‘’more understanding of the financial requirements of the restructuring’’ and reiterated that small and medium enterprises, the service sector, energy-efficient projects and rural projects were priorities for financial support.
Despite strong talk of boosting China’s domestic consumption, details of specific new projects and areas of spending are only slowly emerging. ‘’Within the last week, provincial governments have announced accompanying stimulus programs amounting to 10 trillion yuan,’’ Central China Television said in its noon broadcast. ‘’Among the largest investment plans are that of Yunnan province, at 3 trillion yuan, and Guangdong at 2.3 trillion yuan.’’ The planned investments span many sectors, including rail, roads, ports and housing, CCTV said. The spending will emphasize rural infrastructure, it added. China’s state media has launched a propaganda drive to encourage domestic consumption and bolster confidence. On Sunday, state-run media reported calls for confidence by premier Wen Jiabao as he visited the wealthy Yangtze Delta, a hub for banking and export-oriented private businesses.
China’s annual GDP increase slowed to 9.0 percent in the third quarter from 10.1 percent in the second quarter, putting the economy in line for single-digit growth in 2008 after five straight years of double-digit expansion.