SDB raises infrastructure loans
State Development Bank (SDB) - one of the mainland's three policy banks - will increase loans for infrastructure spending by almost 25 per cent this year to about 112 billion yuan (about HK$104.27 billion) to help stimulate economic growth.
'Originally, we targeted a figure of 90 billion yuan, but now this will be raised to 111.5 billion yuan,' Yuan Yinghua, the bank's deputy general manager (international co-operation), said.
This ties in with Beijing's plan to speed up spending on roads, rail lines, power stations and airports to boost economic growth to 8 per cent this year amid projected declines in exports and foreign direct investment.
Government leaders previously indicated infrastructure investment in the remaining years of the Ninth Five-Year Plan would amount to US$1 trillion to spur domestic demand.
'For a period from now, we will focus on beefing up irrigation works for agricultural use and expanding energy plants, railways, roads and environmentally friendly infrastructure projects,' Mr Yuan said.
The bank would rely on domestic bond issues and postal savings for its funds. Traditionally, the two sources account for up to 80 per cent of SDB's funding, with the rest coming from the government budget and international bond issues.
The bulk of the loan increase would be used to build additional roads and railways to ease pressure on the existing network.
'Initially, we planned to build more than 1,000 kilometres of highways in the next three years; now, we will increase it to more than 4,000 km.' Public transport bottlenecks meant 8 per cent of the country's villages and towns, and 18 per cent of administrative counties could not be reached by road.
'In some cities, traffic jams are becoming a difficult problem,' Mr Yuan said.
This slowed the average speed of public transport in the cities to 12 km an hour, from 20 km/hr in the 1980s.
Additional financing will be given for the construction of nine new rail lines this year to ease the overstretched system, which only could handle a billion people making one trip each year.
Each kilometre of railway track carries a capacity two to three times that of other countries and some regions, especially in the southwestern provinces, do not have any rail lines.
Several of the nine tracks to be built this year will run through the southwestern region, including one line which will link Nanjing to Kunming and another from Meizhou to Kanshi.