Mainland provinces plan building spree to counter economic slowdown

Hubei, Henan, Jiangsu, Gansu and Anhui provinces will spend 400 billion yuan (HK$491.3 billion) on infrastructure projects in the next few years, mostly on roads.

"China plans to accelerate infrastructure investment to offset the slowing economy. The country needs to spend 800 billion to 1.5 trillion yuan to get the economy back on track," said a report from investment banking group CLSA.

"The government miscalculated by how much the economy would slow down," said Francis Cheung, CLSA's managing director of China-Hong Kong strategy.

In prospectuses to bond issues to finance its investments, Hubei Provincial Communications Investment, an infrastructure firm wholly owned by the Hubei government, said it would invest 102.5 billion yuan to build 1,628 kilometres of roads and 36km of railways from this year to 2015.

Jiangsu Communications Holding, an infrastructure firm controlled by the Jiangsu provincial government, said it would invest 81 billion yuan in building expressways and 16 billion yuan in railway links in the next five years.

Anhui Expressway Holding Group, wholly owned by the Anhui government, will build expressways with an investment of 37.3 billion yuan from last year to 2014.

Henan Transport Investment Group, wholly owned by the Henan government, will spend 14 billion yuan to continue six highway projects from this year to 2014. It will also invest 9.49 billion yuan on a new expressway from 2012 to 2017.