Infrastructure could help bolster slowing economy: Premier
SHANGHAI (Reuters) — China will soon start construction on a series of major energy projects, including nuclear and hydropower plants, Premier Li Keqiang said on Sunday, highlighting an infrastructure build-out that could help bolster the slowing economy.
Earlier this month, Li said China would not take strong, short-term measures to stimulate the economy, focusing instead on ways to promote healthy growth over the medium- to long-term.
"We will soon start construction on a number of large projects," Li was quoted by the government's main information website (gov.cn) as saying at a meeting of the national energy committee.
It was unclear if Li was talking about kickstarting projects already in the pipeline or was announcing new projects designed to promote economic activity.
Investors have long steeled themselves for growth to slow as China's economy matures, especially as the government tries to steer it away from investment- and export-driven growth and towards consumption-led activity.
Economists have repeatedly cut their growth forecasts for 2014, with a Reuters poll showing growth is forecast at 7.4 per cent, a shade below the government's 7.5 per cent target.
After the government announced last week that growth in the first quarter was 7.4 per cent, Li announced a relaxation in reserve requirements for rural banks to help the farm sector.
The energy-related projects "will be important measures to stabilize growth and improve energy security capabilities, and an effective starting point for the adjustment of the energy structure and changing the mode of development," Li said.
China should, "in a timely manner," launch important nuclear power projects along the east coast that employ the highest international safety standards, while building new hydropower plants while protecting the environment, he said.
China in October began approving new nuclear reactors after a year-and-a-half ban by Beijing following the Fukushima disaster in Japan. Beijing aims to bring capacity up from 12.57 gigawatts to 58 GW by the end of 2020. Nearly 30 GW of new capacity is under construction in China, more than 40 per cent of the world's total new-build.
Air pollution has become a major concern across China and Li said the country would try to boost the development of electric cars and upgrade coal-burning power plants that failed to meet emission reduction requirements.
Li also said the government would start construction on ultra-high voltage power lines to transport power from western regions to the power-hungry east coast, while accelerating the development of unconventional energy resources, including shale gas, shale oil and coal bed methane.
An almost unabated run of disappointing data this year has fuelled investor speculation the government would loosen fiscal or monetary policy more dramatically to shore up activity.
Authorities so far have resisted broad stimulus measures but earlier this month announced tax breaks for small firms and plans to speed up some infrastructure spending, including the building of rail lines.