$1356b development for Yangtze Valley

CHINA yesterday announced a 1,000 billion yuan (HK$1,356 billion) plan to turn the Yangtze River Valley into an economic powerhouse for the country.

But Vice-Premier Mr Li Lanqing warned that such a vast infrastructure development along the ''golden waterway'' could overheat the economy.

About 10 per cent of the total investment, or 110 billion yuan, will come from the state treasury, with the rest from the localities along the way and private and foreign investors.

To speed up the development of a prosperous Yangtze economic corridor, the government has pooled these resources.

But Mr Li feared spending over the next eight years could further fuel inflation, which has soared in major cities recently.

Officials were quoted as saying that they expected the Yangtze River plan would lure about US$10 billion (HK$77.2 billion) in foreign investment.

An official from the State Planning Commission said: ''The development strategy will have a significant and far-reaching impact on the economy in the region along the Yangtze River and nationally. This will be a rare opportunity and an enormous market for foreign investors.'' The new Yangtze River Delta and belt region starts from Shanghai's Pudong in the east to Chongqing city in the western province of Sichuan, and takes in 28 large cities.

More than 100 core development projects will be undertaken, including a US$1.3 billion oil refinery at Jinshan in Shanghai; an international airport in Pudong; the second phase of the nuclear power plant in Qinshan and the Three Gorges Dam Project.