Project approval at peak rate

The National Development and Reform Commission, China's top planning agency, approved more than 200 investments projects each month in the last quarter after the government asked for additional efforts to maintain steady economic growth.

Zhang Changmao, an economics professor at the Party School of the Communist Party of China Central Committee, said that the faster approval was a move to revitalize the cooling economy, but that the projects had also been repeatedly discussed before being approved.

"The approval process is likely to see a slowdown this year when the economy gets back on track," Nddaily quoted Zhang as saying. He added that more policies are needed such as tax cuts and easing monetary policies.

However, Li Huiyong, chief analyst of macroeconomics at Shenyin Wanguo Securities, said that the sources of funding for the projects might be a top concern for cash-strapped local authorities.

Facing shrinking land sales revenue and a large amount of debt of their financing vehicles, local authorities may explore new financing channels such as cooperation with trust companies, Li said.

"The new funding sources will help ease the financial strains for local governments, but we should also pay close attention to the financial risks they bring," he said.

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