China approves plan to build new roads to boost economy

10:13, 7 September 2012

BEIJING. September 7. KAZINFORM China approved plans to build 2,018 kilometers (1,254 miles) of roads, its second major construction announcement this week, as the government tries to revive economic growth that has cooled to slowest pace in three years.

photo: QAZINFORM

The projects include highways in Zhejiang and Xinjiang provinces, according to statements on the National Development & Reform Commission's website. The approvals were given during June-August period. The agency also cleared plans for nine sewage-treatment plants, two waterway upgrades and five port and warehouse projects, without disclosing the required investments, Bloomberg reports.

Building-related stocks jumped following the announcements, which came a day after the country's top economic planner backed plans for subway projects in 18 cities and after an increase in the rail-construction budget. The move will help accelerate infrastructure investment growth to more than 20 percent year- on-year from 15 percent, according to HSBC Holdings Plc.

"Beijing policy makers are stepping up efforts to speed infrastructure investment to hold up growth," Qu Hongbin and Sun Junwei, economists at HSBC, said in a note yesterday. "We expect a fast filtering-through process to generate a modest growth recovery in the coming months."

Shares Jump

Anhui Conch Cement Co., the nation's biggest cement-maker by market value, jumped as much as 5.7 percent, the most since March, to HK$20.85 in Hong Kong trading. It was at HK$20.75 as of 10:29 a.m. Gansu Qilianshan Cement Group Co. (600720) surged by the daily 10 percent limit in Shanghai.

Sany Heavy Industry Co. (600031) , China's biggest construction- equipment maker, jumped as much as 8.2 percent in Shanghai trading. Lonking Holdings Ltd. (3339) , a Shanghai-based maker of wheel loaders and bulldozers, surged as much as 11 percent, the most in almost eight months in Hong Kong.