State Development Bank (SDB) is considering stimulating economic growth by setting up an investment bank to help companies raise funds for infrastructure spending, sources say. SDB governor Chen Yuan has recruited Di Weiping, the People's Bank of China (Shanghai) executive vice-governor, to look into the feasibility of an investment bank. 'Mr Di has left us to join the SDB and we are having a farewell party for him on Monday,' a PBOC Shanghai official said. Until his new assignment, Mr Di was in charge of foreign financial institutions in the country's emerging financial centre and helped to implement the trial scheme where nine foreign banks could carry out business in local currency. He joins SDB at a time when Beijing is expanding the role of the lending arm in order to inject infrastructure investment to help trigger growth as external demand is projected to decline. The mainland hopes to achieve 8 per cent economic growth this year and is relying on hundreds of billions of yuan in investment on roads, railway lines, power stations, airports and irrigation systems to generate at least a third of that growth. 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. Just how to raise the money is taxing the mind of Mr Chen, who was transferred from the central bank to head the SDB two months ago. SDB draws funds largely from domestic and international bond issues and postal savings, with a small slice from the government. Given the huge outlays needed in the next few years, it has to look at more ways of raising money, and the establishment of an investment bank is being considered. 'We are thinking of setting up the investment bank ourselves, but nothing is finalised yet,' an SDB official said. Analysts wondered if the idea of the bank would conflict with SDB's objectives - to lend to projects backed by the central government or regional administrations. 'An investment bank's goal is to maximise profit whereas a policy bank is set up to make policy loans which, by their nature, are meant to help the government to achieve certain goals,' a foreign investment banker said.