International Law

Government increases Central Regions Infrastructure spending to USD67 billion for 2008

By Chris Devonshire-Ellis

Policy shift targets rural areas instead of developed coast for infrastructure spending, Guangdong based low cost manufacturers relocating

February 12th - The central government has topped up its investment budget for rural areas by an increased RMB100 billion ($13.9 billion) this year, Chen Xiwen of the Central Leading Group of Rural Work announced in his New Year Working report.

The funds are earmarked for the construction of infrastructure projects for water, gas and electricity, as well as agricultural technology, among other projects, including investments in education and medical services. The final budget will be decided at the national congress to be held early in March.

The government increased its budget for rural areas by RMB 80 billion last year, a record increase at the time. After decades of supporting urban development at the expense of the countryside, the authorities have begun to address the gap between urban and rural incomes. The contentious, 2,000 year old grain tax was abolished in 2006 along with other arbitrary fees, and free grammar school education was reinstated last year. However, infrastructure investment is still needed to support agriculture production are this is under strain, Chen said, quoting as an example that more than 30,000 of China’s 87,000 dams are unstable leading to water loss, poor water management, increased expenditure, less productivity, and in some cases, dangerous agriculural conditions. (more…)

Full post as published by China Briefing Blog on February 12, 2008 (boomark / email).