Infrastructure development 'key to growth'
Vladivostok (Russia), September 9, 2012
Chinese President Hu Jintao has urged Asia-Pacific nations to speed up infrastructure development to help face the 'grave challenges' from the global economy, in comments that follow Beijing's unveiling of $157 billion in such projects.
The remarks at the annual Apec summit lent further weight to what analysts see as an increasingly vocal commitment from Beijing to stimulate the economy by leaning heavily on the construction of railroads, ports and other infrastructure.
China's economic planning body, the National Development and Reform Commission, has approved 60 infrastructure projects worth more than $150 billion.
The news boosted asset prices from steel futures to stocks, especially of companies related to construction.
'To strengthen infrastructure development is key to promoting recovery and achieving sustained and stable growth,' Hu told an Apec business leaders' conference in Vladivostok, Russia.
'Governments should play an important role in infrastructure building and step up financial support for infrastructure development,' he added, pledging later to 'increase input in infrastructure development and social services' in China.
Although the value of the projects is much smaller compared with China's mammoth stimulus package during the global financial crisis, analysts said they may feed through to the economy by the fourth quarter of 2012 to arrest a consistent slide in GDP growth since the beginning of 2011.
Analysts have steadily cut their 2012 GDP growth forecasts to converge with Beijing's target of 7.5 per cent, which would be the weakest in at least 13 years. Predictions for a recovery have also been pushed out from the first quarter of 2012 to the fourth quarter.
Chinese economic data scheduled for release today and tomorrow is expected to back the view that growth in the world's second-biggest economy is still slowing down.-Reuters
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