Infrastructure projects totaling $135b get underway in areas like water, railways

China’s western and border regions have enjoyed a surge in infrastructure investment this year, including railways, and will continue to enjoy high levels of spending next year, officials said.

According to the latest figures released on the National Development and Reform Commission’s website, 33 infrastructure projects kicked off in 2014 in the regions, worth a total investment of 835.3 billion yuan ($134.7 billion), compared to total investment of 326.5 billion yuan on 20 projects in 2013.

New railways construction particularly－for example, the lines being built from Lhasa to tourism resort Linzhi in the Tibet autonomous region and from Chengdu to Ya’an in Sichuan－will help facilitate a surge in business and tourism to the regions, according to officials.

The NDRC has revealed a long list of new national projects in recent months, emphasizing that infrastructure investment will continue to play a significant role in supporting the slowing economy over the coming 12 months.

The planned new railways and water projects will serve to revive western regions and the intercontinental land routes, said Guo Xujie, an official of the NDRC’s department of western region development.

“The new Silk Road initiative has injected more momentum into the development of the western regions, while the new infrastructure projects will bolster the implementation of the strategy,” said Guo.

President Xi Jinping first proposed in 2013 that China works with other Central Asian countries to build an economic belt along the route of the ancient Silk Road, in a trans-Eurasian project linking the Pacific Ocean to the Baltic Sea.

The NDRC is pushing ahead with plans to build more railway projects, including a line from Zhengzhou in Henan province to Wanzhou in Chongqing, and one from Yuxi to Mohan in Yunnan province, Guo said.

The Zhengzhou-Wanzhou line has already been approved by the NDRC, worth an estimated total investment of 97.4 billion yuan, according to media reports.

Chen Fengying, director of the World Economy Institute at China’s Institute of Contemporary International Relations, said the new projects are a signal of the country’s economic strategy for the coming year.

The government is seeking “new economic drivers”, she said, and as consumption still cannot play a sufficient role in boosting the sluggish economy, many think infrastructure investment remains crucial.

The new economic belts along the western region and the Yangtze River, the Beijing-Tianjin-Hebei region and the China (Shanghai) Pilot Free Trade Zone will become China’s new beacons of economic growth, she said.

Chinese leaders said in November that the country would put $40 billion into a special New Silk Road fund to drive investment in infrastructure, speed industrial and financial cooperation, and break the connectivity bottleneck in Asia.

That new fund will focus mainly on overseas projects, said Chen, with the new railway projects financed mainly through local government funding and public-private partnerships.

ENERGY USE DECLINES IN CHINA DURING 2014

Energy use per unit of GDP－a measure of the energy efficiency of a nation’s economy－is expected to decline by up to 4.7 percent in China in 2014, according to a leading official at the country’s top economic planner, signaling changes in the structure of the world’s second-largest economy and the impact of slower economic growth.

The forecast is higher than the 3.9 percent target set at the beginning of the year, and just higher than the 4.6 percent fall recorded for the first three quarters of 2014.

Xie Zhenhua, vice-chairman of the National Development and Reform Commission, said China’s economic transformation requires specific energy structure adjustments to be made.

China will increase the share of non-fossil fuels in its overall energy mix to 11.4 percent by 2015, said Xie, and aims to raise the share of non-fossil fuels to 20 percent by 2030.

The country will also step up efforts at shutting down outdated production capacity and strictly control newly added capacity in energy-guzzling industries such as steel, nonferrous metals, building materials, petrochemicals and chemicals by fully implementing environmental assessment procedures, Xie said.