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China vows to improve "lagging" urban transport system

BEIJING, Oct 10 (Reuters) - China will increase governmentspending and offer tax breaks to quicken the development of thecountry's urban public transport system, the cabinet said at aregular meeting on Wednesday.

The move aims to relieve worsening traffic congestion andair pollution in cities, the State Council, or China's cabinet,said at the meeting chaired by Premier Wen Jiabao, according toa statement published on the government's website.

China has announced a number of new infrastructure spendingplans to help shore up a slowing economy, but has providedlittle detail on how they will be funded.

"Nowadays, the urban public transport system can no longersatisfy people's demand and lags behind economic and socialdevelopment," the statement said.

"Therefore, we should make it a priority to develop thepublic transport network in cities," it said, adding that thesystem would incorporate buses, subways and tramcars.

Those companies involved in the construction or operation ofpublic transport systems will be offered tax cuts andpreferential prices on power and fuel.

Beijing will also channel private sector funds to invest ininfrastructure related to urban public transport, it added.

Earlier this year, China opened a number of state-dominatedsectors -- including many infrastructure projects -- toinvestment by private capital .

The latest announcement only provided a broad policyguideline without further elaboration.

(Reporting by Aileen Wang and Lucy Hornby; Editing by JeremyLaurence)

((lan.wang1@thomsonreuters.com)(86 10 6627 1032)(ReutersMessaging: lan.wang1.thomsonreuters.com@reuters.net))

Keywords: CHINA ECONOMY/TRANSPORT

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