While US lawmakers bicker over whether federal money should be used for critical infrastructure upgrades and Republicans denigrate President Obama’s stimulus program, China’s announcement of the same met with the biggest domestic stock market rally in eight months.
China approved $157 billion in spending for 60 different projects. They represent about a quarter of the $630 billion stimulus package adopted in response to the 2008 global financial crisis, reports Reuters.
Among the projects approved and fast-tracked are the 107-mile expansion of a railroad network that crosses three provinces in western China; over 1254 miles of roads; nine sewage treatment plants; waterway upgrades; wind farms and subway projects in 18 cities.
Investment programs such as these drove over 54% of China’s 9.3% expansion in the past year, reports Reuters.
The world’s second-biggest economy has slowed for the past seven quarters compared to previous years. Current forecasts call for growth of about 7.5% in 2012, the worst in at least 13 years [but still unsustainably high to some of us].
The money for these projects is likely to come as a combination of private financing and government funding, in the form of bond sales or loans from state-owned banks.
Subsidzes Energy-Efficient Technologies
As part of the infrastructure upgrades, China is also allocating $2.2 billion in a one-year subsidy program to buy six kinds of energy-efficient technologies: computers, air conditioners, fans, water pumps, compressors and transformers, reports the state news agency, Xinhua.
The initiative is intended to raise the market share of energy-saving systems in use to more than 40%, while driving about $24.5 billion in demand for new technology sales.
"The move marks the government’s effort to combine stabilizing economic growth and stoking domestic demand with promoting energy savings and emission reductions," reports Xinhua.
If the program is successful, the new technologies will save about 31.1 billion kilowatt-hours (kWh) of electricity a year.
There are about 130 million desktop computers in China, which use about 31.2 billion kWh of power each year. Annual electricity consumption from air conditioners is more than 10 times that amount.
Many current technologies for fans, pumps, compressors and transformers installed in China are only 80% as efficient as those in developed countries, which is another reason for motivating upgrades, Xinhua reports.
The country has been subsidizing energy efficient products since 2009. Sine June 1, China has been subsidizing five kinds of energy-saving home appliances: air conditioners, flat-panel televisions, refrigerators, washing machines and water heaters.
China plans to invest about $372 billion over the next three years on energy conservation, green building and anti-pollution measures to help curb carbon dioxide (CO2) emissions. China is responsible for 29% of the world’s CO2 emissions, and its emissions rose 9.3% last year alone.
For a list of the 60 newly approved Chinese infrastructure projects: