SHANGHAI/BEIJING China gave the green light for 60 infrastructure projects this week as it looks to energize an economy mired in its worst slowdown in three years, fuelling hopes that the world's growth engine may get a lift from the fourth quarter.
China's powerful economic planning body, the National Development and Reform Commission, announced approvals between Wednesday and Thursday for projects that analysts estimate total more than 1 trillion yuan ($157 billion), or 2.1 percent of China's economy.
The plans to build highways, ports and airport runways are among the most ambitious in China this year and signal growing intent to bolster economic growth as the country approaches a once-a-decade leadership transition, analysts said.
Crucially, the projects are endorsed by Beijing and are likely to proceed. This is in contrast to pledges from nearly a dozen local governments in the last two months to spend around 7 trillion yuan to pump prime the economy, plans that economists say will not materialize due to funding shortages.
"Apart from the large sizes of the projects, the announcements for these new projects were all made in two days, which is very intense," said Zhang Zhiwei, an economist at Nomura in Hong Kong.
"It signals a change in policy stance, which is now much more proactive," he said. China's economy may be boosted by the increased spending in the last quarter of 2012.
Shares in China machinery firms jumped on the news. Shanghai-listed Sany Heavy Industry (600031.SS) and Shenzhen-listed Zoomlion (000157.SZ) both jumped more than 6 percent, while Taiyuan Heavy (600169.SS) was up 10 percent.
Investment is a mainstay of China's economic prowess, accounting for 54.2 percent of the country's 9.3 percent expansion in its economy last year.
But scarred by its 2008/09 experience when Beijing's 4 trillion yuan ($630 billion) stimulus averted a prolonged recession but saddled the world's No. 2 economy with a pile of bad debt, China is proceeding with care on spending plans this time.
China has not unveiled any large-scale new government stimulus. Instead, most spending increases are a result of fast-tracking infrastructure projects that are already in the pipeline.
Analysts have also urged caution. Ratings agency Standard & Poor's said last month that China could afford to deliver fiscal stimulus, but risked making bad investments.
The last time China stepped up project approvals was in May, when the Chinese media reported Beijing as saying it may bring forward 2013 investments to support the economy. The total size of investment brought forward in May was not available.
Although approved projects were only announced this week, the commission's website showed approvals were made as early as May, and ran through to August. here
The size and location of projects also mean they likely overlap with spending plans announced by local governments in recent months.
Among the projects approved is an expansion of a 172-km (107 miles) rail track across three provinces between Gantang and Wuwei, in western China, for 3.77 billion yuan. The project got the go-ahead in June. The construction of a 22.1 billion yuan metro line in Hangzhou, capital of eastern Zhejiang province, was approved in July.
Details about how projects would be paid for were sketchy.
"Most likely a majority of funding will be from credit (bank loans or bonds) and we should focus on credit growth instead of government announcement for forecasting economic impact," said Ting Lu, an analyst at Bank of America-Merrill Lynch in Hong Kong.
($1 = 6.3428 Chinese yuan)
(Writing by Koh Gui Qing; Editing by Alex Richardson)