China eyes big construction projects to keep economy growing

China is planning further big infrastructure projects including highways, express train networks and new waterways to keep its economy growing at a stable rate, the cabinet said on Wednesday. Buffeted by unsteady global demand and slowing domestic investment, China’s economic growth fell to an 18-month low of 7.4 percent in the first quarter. Analysts expect the cooldown to deepen slightly, with full-year growth seen at a 24-year trough of 7.3 percent. The dredging of new waterways would be accelerated to clear shipping bottlenecks, and more highways, airports and express train lines would help goods move faster to and from ports, the government said in an online statement after a weekly meeting. The ways in which oil and gas are transported and stored would also be improved, it said, without giving details. Authorities have already made a series of small changes to monetary policy to shore up activity, a process the government said it would continue to help specific areas of the economy. As it is, Beijing has already instructed local governments to spend all of their 2014 budget by the end of June to shore up the economy, or risk losing the funds. As a result, separate data on Wednesday showed fiscal spending surging 25 percent in May alone. To help companies survive China’s cooling economic growth, four different value-added taxes for utilities would be combined into a single tax to be levied at a lower rate of 3 percent from July 1, the government said. Firms affected by the change would save about 24 billion yuan ($3.9 billion) a year, it said.