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Guangdong Launches a Series of New Infrastructure Projects

Since the late 1970s, Guangdong vigorously and spectacularly eliminated transportation and energy bottlenecks with remarkable infrastructure investment and a package of preferential investment policies to support high-demanding social and economic development. Especially at the end of the Eighth Five-year Plan period (1990-1995) and the beginning of the Ninth Five-year Plan(1996-2000), infrastructure investment growth used to outshine economic growth and supplied staunch support to Guangdong’s economic development.

However, upon finishing construction of facilities for the Ninth National Games and other large-scale projects, Guandong recorded a sharp decline in infrastructure investment growth in the second half of 2001. Compared to other provinces and the national average level, Guangdong lagged far behind in the field of fixed assets investment growth. Statistics indicate that from January to October 2001, Guangdong, a developed province, ranked 28th among 31 provinces in the growth of infrastructure investment, urban facilities reconstruction investment, real estate investment and other investment, 7.5 percent lower than the national average growth.

Guangdong Governor Lu Ruihua has vowed to reinvigorate investment structure by favoring investment in public-interest fields, social and infrastructure facilities, according to a government work report to Guangdong provincial people’s congress.

“The government will continue to issue long-term treasure bond for construction this year. Guangdong is resolved to take advantage of lower interest rates and sufficient funds in banks to launch new wave of infrastructure construction investment spree in 2002,” Lu said.

According to Governor Lu, the new wave of infrastructure investment will be different from that of the past. “Five networks, two railways and two ports” are listed as priorities in Guangdong’s Tenth Five-year Plan (2001-2005). “Five networks” refers to an expressway network, information network, quality-graded water supply network, liquid natural gas supply network and electricity network. “Two railways” refers to the Guangzhou underground railway and Shenzhen underground railway projects and to the light railway express transportation system among Pearl River Delta cities. And “two ports” refer to air and seaports.

The plan is that the new infrastructure facilities will lay a solid foundation for Pearl River Delta to make a second take-off. One part of the “Two railways” project -- Guangzhou-Foshan and Guangzhou-Dongguan light rail projects that are in active preparation work -- has attracted immense attention of Foshan city and Dongguan city deputies. Dong Xing, a deputy from Dongguan, said that Dongguan municipality would be in full support of the project. Deputies from Foshan even suggested upgrading the light rail to an underground railway.

Non-government investment has increased fast in recent years but mainly in the real estate industry. According to statistics from the Guangdong Provincial Statistics Bureau, Guangdong has yet to resolve issues such as investment sector access, financing channels and uncertain expected turnout to boost total amount of private investment that to take the place of government investment.

In the government work report, Governor Lu paid much attention to private investment. He proposed to reform the investment case appraisal system to break up monopolies and adopt a legal individual bidding system for infrastructure facility projects to encourage social funding of major infrastructure projects. Except for a few projects that must be operated and controlled under state monopoly, other projects will be further opened to social investors.

“Domestic private funds should also have access to fields where foreign funds are permitted to expand their investment depth and width,” Dong Xing said. Guangdong Development Planning Commission also suggested taking effective measures to usher social investment to new infrastructure facilities construction. Huang Weihong, director of the commission, personally predicted Guandong will see an investment growth of 12 percent, four percent higher than national average fixed assets investment growth with a total investment of 86.2 billion yuan (US$10.41 billion).

(People’s Daily—South China News, translated by Alex Xu, March 20, 2002)

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