China approves $1.1 trln in projects

Said to be different from 2008 stimulus spending

China has approved investment projects worth 7 trillion yuan ($1.1 trillion) that will be launched this year, a report said Tuesday.

Analysts said that more investment will help stabilize the economy but a large-scale economic stimulus plan is unlikely.

China is accelerating 300 infrastructure projects valued at 7 trillion yuan in 2015 as part of a broader investment plan worth 10 trillion yuan running from late 2014 through 2016, Bloomberg reported Tuesday, quoting an unidentified source.

China has sped up the approval for infrastructure projects amid the cooling economy. The National Development and Reform Commission (NDRC), which Bloomberg reported will oversee the projects, said at a news conference on November 26 that it has already facilitated projects in seven areas including transportation, clean energy and water conservancy as part of an investment plan starting from 2014.

These projects have been approved by the State Council, China's Cabinet, Li Pumin, spokesperson of the NDRC, said at the conference.

But the NDRC so far has not unveiled the total volume of investment in the plan and did not respond to the Global Times by press time.

The Bloomberg's report came after the National Bureau of Statistics (NBS) released data Thursday showing the manufacturing purchasing manager's index (PMI), a key measure of factory activity in China, slumped to 50.1 in December, underlining the economy is still facing downward pressure.

Investment projects approved by the State Council will help stabilize the economy and develop sectors which lacked investment previously, such as water conservancy, Zhang Yansheng, secretary-general of the Academic Committee at the NDRC, told the Global Times on Tuesday.

However, the extensive investment does not mean the government will start a new round of major economic stimulus, Zhang noted.

"These projects in the investment plan are not approved hastily for stimulating the economy," Zhang said.

Compared with some off-budget investment projects added in the 4 trillion yuan stimulus package in 2008 to shore up the economy during the global crisis, these projects are planned ahead and consistent with China's 12th Five-Year Plan (2011-15), Wang Jun, an economist at the China Center for International Economic Exchanges, a Beijing-based think tank, told the Global Times Tuesday.

2015 is the last year for the 12th Five-Year Plan period and due to pressure on the central and local governments to complete the plan on time, it is normal to see investment financed by government accelerated, Wang said.

Besides financial funds from the government, Li said at the news conference in November that the NDRC will encourage private capital to invest in the public sector projects by easing access thresholds.

Investing in projects in the public sector, as well as introducing more private capital, will make the current investment different from the 4 trillion yuan package which critics said created overcapacity and increased local government debts, Wang noted.