According to the Shanghai-based China Business News, the transport ministry is planning 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.

In accordance with the saying that the massive spending was being considered as “such investment can produce an immediate effect (on domestic demand)”, an anonymous source with the ministry was cited.

The report said the 5 trillion yuan figure includes funds the government had already planned to be used for highway construction projects.

It also 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 (2210-20).

The investment is part of the government’s goal to have 95 percent of all towns and 80 percent of all villages linked by a national road network by the end of 2020.

According to earlier government forecasts, China’s expressways will stretch from 45,400 km at the end of 2007 to 65,000 km.

The source was quoted as saying, “the targets can be achieved earlier than expected”, if the State Council approves the extra spending.

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.

He said that the total amount has not been decided.

Based on media reports, industry experts, hailing the news, said large-scale spending on infrastructure is necessary for stimulating domestic demand.

Similarly large investments were made in the years following the 1998 Asian financial crisis to counter the effects of the regional depression.

While he welcomes the extra spending on highway projects a more pressing requirement was the development of the nation’s ports and docks, said Zhang Wenjie, a professor at Beijing Jiaotong University.

He said, “This area deserves a much larger proportion of the spending, as we still lag a long way behind developed countries in terms of numbers.”

The State Council approved 2 trillion yuan on Oct 24 for the construction of a series of railway projects to help boost economic growth amid the worldwide financial crisis, as well as the proposed new investment.

The new projects will be good news for the country’s steel and cement industries, as well as offering jobs in construction.

Are you interested in the business opportunities in China?

China is one of the world’s great growth markets and is likely to be for many years to come. Foreign companies often face difficulties in assessing Chinese market demand and enacting effective strategies because of the language barriers, culture differences, and high expense.

BPOVIA is the leading virtual assistant and Knowledge process outsourcing (KPO) service provider in China. BPOVIA is the only virtual assistant company ever been nominated for the prestigious “Red Herring 100 Asia” Awards 2008. Combines international perspective with local know-how, BPOVIA can provide our clients China business development service and help our clients doing successful business in China.

Please visit http://www.BPOVIA.com/ for details about our service.

Popularity: 2% [?]

$730b, demand, domestic, infrastructure, stimulate