The muddied details of China’s 4 trillion yuan stimulus measures announced earlier this month became no clearer with reports by state broadcaster CCTV that projects planned by provincial governments will add 10 trillion yuan to the pot. Among stimulus measures announced in the past week, CCTV said, were 3 trillion yuan to be spent by Yunnan and 2.3 trillion by Guangdong, the money earmarked for infrastructure.
As with central government’s proposed spending plans, it is difficult to distinguish between already budgeted and new monies, and there is little detail on specific new projects. Much of this 10 trillion yuan may be for wish-list projects, see below, that will never see the light of day. Throwing around big headline numbers seems to be part of a propaganda drive to encourage domestic consumption and bolster confidence as economic growth slows.
Another report on CCTV may throw some light on the big numbers being thrown around by the provinces. The broadcaster interviewed Qiu Yunyang, chief of the Development and Reform Bureau of Hubei’s Zaoyang City, about Beijing’s plan to spend 100 billion yuan of its stimulus package in the fourth quarter.
“That means an upcoming investment boom. but it’s not easy to secure central finance. Only those who have a good reserve of projects will have a better chance,” Qiu said.
Qiu said he and his colleagues have been putting in extra hours to find a long list of suitable projects to get a slice of the newly available pie. They’ve already found a 100. CCTV goes on to list province after province where officials are doing exactly the same. Doesn’t take long to get to 10 trillion yuan that way, even if much of it is pie-in-the-sky.
