China targets energy, exports for big spend

By Fu Chenghao  |   2008-11-13  |     NEWSPAPER EDITION

CHINA yesterday approved 200 billion yuan (US$29.3 billion) worth of energy projects, export tax incentives and other efforts to spur domestic demand and prompt economic growth as part of its new financial stimulus campaign.

The State Council, at a meeting chaired by Premier Wen Jiabao, authorized the construction of the eastern section of the second west-east gas pipeline at a cost of 93 billion yuan.

That section runs from Zhongwei in Ningxia Hui Autonomous Region to Guangzhou and Hong Kong.

The Cabinet also approved the construction of a nuclear power plant in Yangjiang, Guangdong Province, and the expansion of another in Qinshan, Zhejiang Province, with a combined investment of 95.5 billion yuan.

The nation will begin constructing 10 nuclear power reactors with a capacity of 1,000 megawatts each in the eastern provinces of Fujian, Zhejiang and Guangdong, the National Development and Reform Commission said in a separate statement on its Website yesterday.

In addition to the gas and nuclear power projects, 17.4 billion yuan will be spent on several hydroelectric complexes and airports across the nation. And a 12-million-ton-a-year coal mine will be built in Shaanxi Province along with a 10-million-ton-a-year oil refinery in Chengdu, capital of Sichuan Province.

The spending authorizations followed Sunday's State Council announcement of a massive 4-trillion-yuan stimulus plan that economists say could not only help keep the country growing but also aid in combating the global financial crisis.

"The government is moving quickly this time," said Qilu Securities analyst Gu Guorong. "Spending on such major energy projects could boost domestic demand and also help safeguard future energy security."

The State Council also decided to raise value-added tax rebates on 3,770 export items, mainly products in labor-intensive industries, or 28 percent of China's tariff lines, starting next month to aid small and medium companies.