China confirms $1.7 trillion spending plan: U.S.
China confirmed to visiting U.S. officials that Beijing plans to pour $1.7 trillion into the so-called "strategic sectors" over the coming five years, U.S. Commerce Secretary John Bryson told reporters on Monday.
The confirmation of the huge sum of money showed Beijing's ambition to shift the growth engine of the world's No.2 economy to cleaner and hi-tech sectors while also boosting domestic growth as the global economy struggles.
Reuters reported a year ago that Beijing was considering investing 10 trillion yuan ($1.7 trillion) over five years in seven strategic industries, but Beijing has never confirmed the price tag of the package, which was 2.5 times as big as the eye-popping 4 trillion yuan fiscal stimulus launched during the global financial crisis in 2008.
There were also concerns that China would scale back some investment plans in these sectors, notably manufacturing of hi-speed railway equipment, after a deadly train crash.
But Bryson said the Chinese officials in Chengdu have put up a number that is unchanged from the very beginning.
"Much of the emphasis on the emerging industries and the $1.7 trillion investment was focused on clean energy and clean energy technology," Bryson said, referring to discussions at the U.S.-China Joint Commission on Commerce and Trade (JCCT) meeting in the southwestern Chinese city of Chengdu.
Bryson added that Chinese Vice Premier Wang Qishan said U.S. and other firms would enjoy the same opportunities as Chinese firms to take part in the growth of these sectors.
"We had a very good dialogue on China's strategic emerging industries and we welcome China's commitment that it will create a fair and level playing field for U.S. companies in those industries," Bryson said.
According to Beijing, the targeted sectors include alternative energy, biotechnology, new-generation information technology, high-end equipment manufacturing, advanced materials, alternative-fuel cars and energy-saving and environmentally friendly technologies.
To fulfill the spending target, the central Chinese government itself would most likely not deliver the bulk of the money, but would seek to spur spending by corporations, investment by local governments and lending by banks.
[Source: By Chris Buckley, Reuters, Chengdu, Chn, 21Nov11]
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