China relaunches its economy with 80 large infrastructure projects

BEIJING - China announced at the end of April 80 major public infrastructure projects to counter the effect of a slowing economy while opening up further its markets to private and overseas investors. The decision was made at a State Council executive meeting chaired by China Prime Minister Li Keqiang, the second meeting in a month to focus on infrastructure investment.

The projects will cover important infrastructures such as railway networks and harbour construction, new infrastructure needed by information technology, major clean energy projects such as hydropower, wind power and photovoltaic power, as well as the modernization of oil and gas and chemical industries.

No exact figure has been communicated about the financial impact of these projects and their generating value. Information only filtered for rail development: the opening of rail infrastructure to private investors would then boost investments between 200 and 300 billion Yuan (US$ 31 to US$ 46 billion) each year compared to an estimated US$ 24 billion today. "All the railway projects that have been approved by the State Council should start construction as soon as possible, and preliminary work should be done to ensure railway investment will grow steadily," the State Council said.

Economists estimate that overseas investors should be among the major winners from the new projects thanks to a liberalisation of economic activities which were until now restricted to foreigners. According to the China Daily newspaper, the State Council indicated that private investment will be encouraged to enter fields that are "monopolistic in nature" or "used to be dominated by government investment and State-owned enterprises".

In 2013, private-sector investment accounted for 63 percent of China's total capital investment, according to the government. The State Council also decided that oil and gas exploration but also airport construction will be the next fields to be opened to private foreign bidders.

According to economists, China full-year economic growth is expected to reach 7.4 % this year, far from the double-digit rates that China used to record prior to 2012. Signs of a slowdown were revealed during the first quarter in a series of economic indicators, prompting the government to unveil a new stimulus package.

Sourced: TravelDailyNews