Chinas government wants to meet its target of growing the
economy by 7.5 percent this year and has launched a package of
low-profile infrastructure investments to help achieve its
isnt on a par with the 4-trillion-yuan ($648-billion)
injection seen in 2008, but it has played a crucial role in
turning sentiment around, evidenced by benchmark iron ore
prices averaging more than $130 per tonne so far in the third
The government appears
keen to provide a steady flow of investment as it pursues a
broader and riskier package of economic reform.
The new government has
a higher tolerance for a relatively slow economic growth rate,
but has more determination to improve the countrys
economy by boosting consumption.
Premier Li Keqiang is
"not interested in driving up growth rates to an unsustainable
level at the expense of future instability in the economy and
financial system," economists from Switzerlandss Credit
Suisse Group AG said in a research note Sept. 4.
Chinese state media or
government websites, some of the confirmed projects tied to the
steel sector include:
projects: The State Council in late-July decided to raise its
railway investment in 2013 to 690 billion yuan ($112 billion)
from 650 billion yuan ($105 billion). New projects will number
47 this year, up from the original plan to launch 37 schemes.
Beijing at the same time has opened up more channels for
private financing of rail projects. The government will set up
railway development funds to attract investments, with the goal
of raising 200 billion yuan ($32 billion) from the public in
2013 and 2014.
upgrades: Beijing in late June said it would focus on
accelerating the renovation of substandard housing in a bid to
boost investment and consumption. In line for redevelopment in
the next five years are 10 million households in run-down urban
areas, of which 3.04 million households will be addressed this
year. State-owned Chinese banks are also starting to offer
support to the shantytown renovation. China Development Bank in
early August said it would issue dedicated loans of at least
100 billion yuan ($16 billion) every year for the next five
protection funds: The government is spending more than 1.7
trillion yuan ($276 billion) on environmental protection
schemes over the next five years, which could include replacing
or upgrading industrial equipment.
Urban transportation projects: Authorities in more
than 10 fast-growing cities have received approval for new
projects. The Chongqing municipal government, for one, on Aug.
11 said that a subway project in the city could be kicked off
as early as the end of this year. Its total investment is
estimated to reach 31.4 billion yuan ($5 billion). Typically,
an investment of 100 million yuan ($16 million) in urban
transportation would be able to create 10,000 tonnes of steel
A version of this
article was first published in AMM sister publication Steel