Wires

China raises rail spending plan again to support economy

Share

BEIJING, Oct 11 (Reuters) - China has raised its plannedrailway investment by 20 billion yuan ($3.2 billion) to 630billion yuan for 2012, the Ministry of Railways said, marking athird such increase this year as part of steps to support theslowing economy.

The revised spending plan would be 3.3 percent higher thanan initial 610 billion yuan tally announced last month,according to a bond prospectus published on, the government's bond issuance website.

The increase comes as the government tries to shield theworld's second-largest economy from stiff global headwinds,including fast-tracking some infrastructure projects.

The government has recently approved 25 rail projects thatcould be worth more than 700 billion yuan, as part of measuresto stimulate the country's slowing economy.

The International Monetary Fund on Tuesday cut its forecaston China's 2012 economic growth to 7.8 percent from 8 percentand warned of risks to emerging Asia if the euro zone crisisworsens and the United States does not avoid its "fiscal cliff".

The Ministry of Railways said in September it would boostspending by 30 billion yuan to 610 billion yuan this year whileit raised its target to 580 billion yuan by 12.4 percent inJuly.

The government said on Wednesday it would increase statespending and offer tax breaks to quicken the development of thecountry's urban public transport system.

However, China has cut planned railway investment by 500billion yuan to 2.3 trillion yuan under a five-year plan to2015, official media reported on Tuesday, but that may reflectspending cuts that have already occurred.

China's rail investments slowed sharply in 2011 after afatal high-speed train crash that led to the firing of theminister and some of the ministry's senior staff.

But the government has been trying to boost investment sincethen, approving rail projects and giving the green light for theministry to raise money through corporate bonds.

($1 = 6.2833 Chinese yuan)

(Reporting By Xiaoyi Shao and Kevin Yao; Editing by JacquelineWong)

((xiaoyi.shao@thomsonreuters.com)(+8610-66271221)(Reuters

Messaging: xiaoyi.shao.reuters.com@reuters.net))

Keywords: CHINA RAIL/INVESTMENT