China plans to boost investments in railway, utilities and health, in an attempt to beat the economic slowdown.
The Ministry of Railways aims at spending 470 billion yuan ($74 billion) on bridges and railroads by the end of this year. This represents a 14% increase from the previous figure reported earlier this month. The new investment is larger than the 461 billion yuan from last year and Premier Wen Jiabao hopes that he will succeed in stabilizing the expansion that decreased 7.6% in the previous quarter, for the third year in a row.
“China is selectively upscaling the stimulus,” said Lu Zhengwei, chief economist with Industrial Bank Co. in Shanghai. “Premier Wen Jiabao said China will do something to boost confidence, and this is fresh evidence.”
China’s State Council also plans to make public a list with future projects in industries including utilities, railways, health and telecommunications to attract private investors as the pressure of the decreasing economy is intensifying. China already started a project spreading from 2010 to 2015 and includes 28 cities in China that are building 2,500 kilometers (1,554 miles) of subway lines. It is estimated that the project will cost around 1 trillion yuan and analysts are concerned that this will lead the country into deeper debt.