China approves $40 billion of rail, subway projects to bolster economy
China has approved close to 250 billion yuan ($40.30 billion) of railway and subway projects, the country's top economic planner said on Monday, as Beijing ramps up efforts to support growth amid a wider slowdown in the world's second-largest economy.
China's National Development and Reform Commission (NDRC) said on its website it had given the green light to six projects, including a 46.7 billion yuan subway system in Chengdu, the largest city in southwest China.
The others include a 60 billion yuan railway line connecting the eastern cities of Qingdao and Jinan, and two new rail connections between cities in Inner Mongolia and the existing Beijing-Shenyang high-speed railway, which together will cost 42.5 billion yuan.
Five of the projects were approved in January and February this year and one was approved in May, according to the NDRC.
An acceleration in project approvals coincides with a 33.2 percent jump in fiscal spending in April, which quickened sharply from the 4.4 percent rise seen in March, data from Ministry of Finance showed last week.
"The (April) Politburo meeting paid high attention to the severe situation, and wanted to step up policy support to stabilize growth," Wang Jun, senior economist at Beijing-based think-tank, China Centre for International Economic Exchanges, said.
"Increased fiscal spending and recent monetary policy measures are likely to lead to growth stabilization in the third quarter," he said.
China's economic growth slowed to a six-year-low of 7 percent in the first quarter, as demand at home and abroad faltered. Recent data showed weakness persisted into the second quarter.
Last week, Chinese policymakers ordered banks to keep lending to local government projects under construction, including affordable housing and urban subways.
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