China's economic crisis widening: Report
The deepening global economic crisis, weakened investment and difficulties in industrial production have affected the Chinese economy in a manner unseen in many years, according to a Cabinet report presented to the parliament.business Updated: Dec 24, 2008 16:25 IST
The deepening global economic crisis, weakened investment and difficulties in industrial production have affected the Chinese economy in a manner unseen in many years, according to a Cabinet report presented to the parliament.
China's legislature Wednesday heard a sombre report on how the intensifying world financial and economic crisis is reverberating across China.
National Development and Reform Commission Minister, Zhang Ping, outlined the situation to the Standing Committee of the National People's Congress.
He said since the third quarter, the impact of the economic crisis has spread from coastal areas to inland regions, affecting export-oriented companies, small and big industries as well as many other sectors.
He said the fast-evolving world economic situation has greatly affected China's economy, with overall growth slowing and imports falling - a situation unseen for many years.
Zhang also noted that investment demand had weakened and there were "difficulties" in industrial production, along with falling revenues and profits for business.
In response to the difficulties emerging since the third quarter, Zhang said, the central government decided to invest 100 billion yuan (about $14.62 billion) during the fourth quarter on new projects and allocated a special earthquake relief fund of 20 billion yuan (about $2 billion).
About 38 billion yuan will go to low-cost housing, rural infrastructure and education facilities. Some 19 billion yuan will be invested in large dams, crop storage and farm animal quarantine networks.
About 18 billion will be put into energy efficiency and pollution reduction programmes, and around 25 billion yuan will be used in building highways and urban power grids, Zhang said.
The central government stimulus plan is expected to draw matching funds from local governments, with the total investment reaching about 400 billion yuan, he said.