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Guangdong plans $347b investment to hold back downtrend

By Zhan Lisheng (China Daily)
Updated: 2008-11-12 07:39

GUANGZHOU -- Guangdong province, one of the nation's key economic powerhouses, will spend 2.37 trillion yuan ($347 billion) on 222 items contained in 10 projects in the coming five years, the provincial development and reform commission said on Monday.

About 1.26 trillion yuan will go toward building expressways, extending railway tracks, refurbishing ports and airports, and building power generation plants, it said.

A total of 731.2 billion yuan will be used to boost the advanced manufacturing and modern service industries. They include iron and steel processing plants, refineries, and ship building and repairing.

About 375 billion yuan will be set aside for the development of public facilities in the cities and rural areas.

"The massive investment in the coming five years is expected to trigger the development of a wide range of industries, and is expected to hold back or even reverse the downtrend in economic development in face of the global financial turmoil and economic slowdown," Li Miaojun, director of the provincial development and reform commission, was quoted by Nanfang Daily as saying yesterday.

"Projects that are ready to begin construction are urged to do so as soon as possible, while those that are in agreement with the nation's industrial policy are encouraged to begin preparatory work as soon as possible," she said.

Li Qingqing, an associate professor of economics with South China Normal University, said the proactive fiscal policy was necessary at a time when the world is witnessing an economic slowdown and the province's foreign-oriented economy is facing a very bleak winter.

Li said the budget of 346.4 billion yuan for railway projects in the next five years is expected to create a market demand for building materials including iron, steel and cement worth more 100 billion yuan, and for the equipment manufacturing industry more than 60 billion yuan.

"What's more important, the investments will improve the province's infrastructure enormously, like transportation and energy supply," she said. "That will lay an even more solid foundation for the future development of Guangdong."

In a recent interview with the Xinhua News Agency, Huang Huahua, governor of Guangdong, said that the budget is part of the province's measures to arrest the further slowdown of its economy.

The province will also encourage people to spend more money by modifying the minimal salary standard, improving social security, pensions, and public facilities and services in the rural areas.