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 emphasise 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.
Despite the need to stimulate the domestic economy, governments should refrain from approving redundant projects, avoid blind investment, especially in polluting or high energy consuming industries, and steer away from the shoddy projects known in Chinese as "tofu dreg" projects, according to a directive from the central planner and finance ministry.
INFRASTRUCTURE:
While China's stimulus package was initially welcomed as a boost to a world worried about increasing economic gloom, some economists later concluded that its impact could be limited, as much of the spending appeared to be previously budgetted items.
The central government has granted 4.8 billion yuan to building rural health care, particularly hospitals and clinics, the Xinhua news agency said on Sunday, as part of its commitment to increase spending rural medical care in 2008. Still, the funding mechanism for many of the announced projects is unclear, while reported numbers are often in flux.
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