Yesterday in Beijing Chinese Premier Li Keqiang chaired a State Council executive meeting which has moved to target infrastructure, via new railways, and help for small business by cutting taxes according to a Chinese Government website.
The site, which we used Google translate to convert back to English, says “the meeting noted that the current domestic and international economic situation is still complicated, we must adhere to progress while maintaining stability, reform and innovation, according to this year’s ‘Government Work Report’.”
It also added: “The meeting noted that this year’s national railway is expected to put into operation more than 6,600 km of new lines, an increase over 1000 km more than last year, of which nearly 80% of state investment will invest Midwest.”
While these measures aren’t exactly unexpected as they have been flagged in previous correspondence and the 2014 Report it is important the government is pulling them out directly and the statement highlights that the government will issue 150 Billion Yuan in bonds ($A26 billion) to help fund the building of the railways. It’s also directing banks to look favourably on loans to aid railway construction.
Like the US in the 1800’s the opening up of China’s interior is expected by the government to aid “urbanisation” as it gets rid of “shantytowns” and moves the population into more organised structures.
The end game for Premier Li and President Xi and their reform agenda seems to continue to be jobs, construction and then growth of consumption and the spreading of China’s economic growth dividend from the few to the many.