BeiJing adds 6 billion yuan to help increase domestic demand

9 days after the China NDRC called for an emergency meeting to arrange for the 100 billion yuan investments in 4Q this year, on 19 November, BeiJing NDRC announced that they will add on 6 billion yuan, which has surpassed one-fifth of the total yearly government investment plan amount. According to rough calculations based on the plans at the beginning of the year, the quarterly investment amount for BeiJing city is close to 6 billion yuan and this newly announced added fund will be finalized in the last 40 plus days of this year.

So how will the 6 billion yuan be spent? The BeiJing city NDRC says that rail projects will be the main area of investment. In the newly created 6 billion yuan investment, rail traffic will take up one-third of it. Till 2010, there will be accumulated investments of up to 90 billion yuan. BeiJing city plans to build 100 km of rail traffic every 2 years with at least 1 rail line in operation every year and realizing 300 km by 2009. Comparing to the BeiJing city "十一五" traffic plan's target of realizing 270 km by 2010, the target has been raised by quite some bit.

1 billion yuan will be used to re-guarantee and supporting VC guide fund for SMEs. In the coming 2 years, re-guarantee fund will expand to 1.5 billion yuan and VC guide fund to go up to 1 billion yuan. Other than that, 1 billion yuan will be used on rural reforms, 900 million yuan will be used to reform dangerous housing and 500 million yuan will be used for city electrical warning systems. Also, 500 million yuan will be used to purchase 1000 electrical powered or hybrid public transport buses.

BeiJing city economy and social development research institute investment and consumer department head 刘秀如 says that the basic thinking is the same with BeiJing city's "十一五" planning. Now is the breaking of the cycle and according to the current project conditions, bring forward the plan for next year to this year end. Based on the BeiJing city 2007 investment contribution rate calculations, 6 billion yuan investment will contribute about 0.6% to the GDP growth rate. The recent data from the BeiJing city bureau of statistics shows that under the effect of financial, industrial and housing, this year's 1Q to 3Q BeiJing's growth rate is 9.1%, lower than the whole of China value of 9.9%.