November 13, 2008

China Takes New Steps to Stimulate Growth

China, which has already announced a $586 billion stimulus plan, plans to spend another $29 billion on several new projects to stimulate growth.

As part of the effort, the State Council also increased export rebates for the third time in recent months, China Daily reported.

The council meeting under Chinese Premier Wen Jiabao said the new projects, designed to help boost domestic demand, will include a natural pipeline from the Ningxia Hui province to Guangzhou and Hong Kong, expansions at two nuclear power plants in Guangdong and Zhejiang provinces, water conservancy projects, and new airports in Anhui province and Inner Mongolia.

To boost exports, the government starting next month will raise rebates on 3,770 products comprising about 28 percent of China's total export items, the report said. The rebates would largely apply to the labor-intensive, and mechanical and electrical product sectors. Details of the actual rebates were not disclosed.

China's economic growth has been slowing. In the latest quarter, growth dropped to 9 percent, or well below 11.9 percent in the same period of last year.

The $586 billion stimulus package, announced Sunday and to be implemented in the next two years, calls for high spending on government construction projects, aid to the poor and farmers and tax cuts for exporters, the report said.