China is planning more budget to infrastructure projects all across the country. The country's central planning agency is preparing $61.4 billion for the purpose in this quarter.
National Development and Reform Commission (NDRC), the central planning agency is preparing 400 billion yuan ($61 billion) budget this quarter for local authorities. The budget will be used to finance the infrastructure project and trigger investment growth. However, Chinese central government have not officially announced the plan yet.
Reuters reported that NDRC said on Sunday that China will speed up the launch of large-scale, strategic construction projects this year. The central government also aim to give more accountability for investment to local governments.
According to NDRC, China needed to find the best combination of reforms to maintain stable growth. That includes making structural adjustments to the country's economy and boost domestic demand.
Earlier NDRC targets the China's economic growth to stay at 6.5% to 7%. As the country's economic growth decelerated to 6.9% last year, the lowest in 25 years.
"This year, we are fixing the economic growth target at 6.5 to 7%, and I believe we have the capability to achieve it," said Xu Shaoshi, chairman of the NDRC said at a media briefing as quoted by Market Watch. Xu Shaoshi is also the member of Central Committee of the Communist Party of China as a group secretary.
Prior to lead NDRC, Xu was a Minister of Land and Resources from 2007 to 2013, and also general supervisor of the land development. In March 2013 he was appointed chief of the NDRC succeeding Zhang Ping.
NDRC determined to stabilize China's economy after a year of slowdown by preparing higher budet on infrastructure project. The commission also plan to decentralize the disbursement of budget to local governments.
Head of of China economics at Hong Kong-based Macquarie Securities Ltd. Larry Hu told Bloomberg, "Infrastructure spending should be the key growth buffer so I would not be surprised to see more like this also for things like highways, railways, pipelines." He also explained the ratio of spending and growth, "To achieve growth of 6.5 to 7 percent, investment has to grow 15 percent at least."
NDRC was founded in 2003 as a macroeconomic management agency for Chinese State Council. The council has fifteen main functions, one of which is directing, promoting and coordinating the restructuring of economic system. It also leads twenty-six functional departments to support the commission achieving its target.
The country's central planning commission will prepare a big budget of 400 billion yuan ($61.4 billion) in this quarter to build infrastructure projects. NDRC aims to maintain the economic growth at 7%.
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