The transport ministry is considering a plan to spend 5 trillion yuan ($730 billion) on road and port infrastructure projects over the next three to five years, in a bid to stimulate domestic demand, the Shanghai-based China Business News reported yesterday.
An anonymous source with the ministry was quoted as saying that the massive spending was being considered as "such investment can produce an immediate effect (on domestic demand)".
The 5 trillion yuan figure includes funds the government had already earmarked for highway construction projects, the report said.
About 140 billion yuan will be spent on roads each year during the 11th Five-Year Plan period (2006-10), and 100 billion yuan a year during the 12th Five-Year Plan period (2011-20), it said.
The investment is part of the government's target to have 95 percent of all towns and 80 percent of all villages linked by a national road network by the end of 2020.
By 2010, China's expressways will stretch 65,000 km, up from 45,400 km at the end of last year, according to earlier government forecasts.
If the State Council approves the extra spending, "the targets can be achieved earlier than expected", the source was quoted as saying.
Transport ministry spokesman Ke Linchun told China Daily yesterday that although additional spending on infrastructure is being considered, the size of the investment has yet to be agreed.
"The total amount has not been decided," he said.
According to media reports, industry experts have hailed the news, saying large-scale spending on infrastructure is needed to stimulate domestic demand.
The government made similarly large investments in the years following the 1998 Asian financial crisis to counter the effects of the regional slump.
Zhang Wenjie, a professor at Beijing Jiaotong University, said yesterday that while he welcomed the extra spending on highway projects, a more pressing requirement was the development of the nation's ports and docks.
"This area deserves a much larger proportion of the spending, as we still lag a long way behind developed countries in terms of numbers," he said.
As well as the proposed new investment, on Oct 24, the State Council approved 2 trillion yuan for the construction of a series of railway projects to help boost economic growth amid the worldwide financial crisis.
As well as creating jobs in construction, the projects will be good news for the nation's steel and cement industries.
Source: China Daily
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