MercoPress. South Atlantic News Agency

China stimulus targets five areas; admits slowdown

For the coming fiscal year China will put the bulk of its investment on the development of agriculture, low-cost housing projects, infrastructure, energy conservation and social welfare, according to the Sunday edition of the People's Daily (Communist Party official newspaper).

Zhang Pin minister in charge of the National Development and Reform Commission (NDRC) said China will pump more funds into the construction of key water control projects, repair of reservoirs in danger and building of more water-saving facilities at major irrigation areas. "Funds will also be earmarked for housing projects to lodge low income families in both urban and rural areas, and local governments are required to provide funds and land for such projects", indicated Zhang Pin. China will also speed the construction of key highway and railway sections for energy transportation. In energy conservation Zhang Pin said China will provide more aid for waster water disposal and garbage processing facilities, production of aircrafts for domestic feeder lines and promote the use of nuclear and wind power equipment with indigenous technology. Finally there will be heaving investment for upgrading school buildings, improving public health networks, family planning service, cultural and education centres in rural areas and other welfare projects. Zhang Pin admitted the five objectives policy was an effort to counter the growing risks of a recession, "greater than expected, in China. "The world and domestic scenarios remain very complicated and it's hard to forecast when, at what moment the full impact of the global financial and economic crisis will impact China", he added. Zhang Pin pointed out that 60% of the Chinese economy depends on foreign trade and the worsening of the global economy and "the contracting of world demand have generated greater risks than expected". The head of NRDC said Beijing officials' main challenge this year and the comino 2009 is "to keep economic growth strong". "The worsening of the global crisis will be long and the world economy will experience a relatively long period of adjustment", emphasized Zhang Pin. He's one of the first Beijing top officials to admit the extent of the crisis in China. China during the first nine months of 2008 expanded at an annual rate of 9.9% following more than five years of double digit growth. Independent economists estimate China will expand 9.5% this year and 7.5% in 2009. Over the weekend it was also announced that China hopes pumping more money (17%) and credit next year will stimulate domestic economic activity and help shield the country from a global downturn. The announcement by the Chinese cabinet comes on the heels of a multibillion-dollar economic stimulus package announced last month.