China’s Li says more ma­jor en­ergy projects to start

Daily Trust - - NEWS -

China will soon start con­struc­tion on a se­ries of ma­jor en­ergy projects, in­clud­ing nu­clear and hy­dropower plants, Pre­mier Li Ke­qiang said yes­ter­day, high­light­ing an in­fra­struc­ture build-out that could help bol­ster the slow­ing econ­omy.

Ear­lier this month, Li said China would not take strong, short-term mea­sures to stim­u­late the econ­omy, fo­cus­ing in­stead on ways to pro­mote healthy growth over the medium- to long-term.

“We will soon start con­struc­tion on a num­ber of large projects,” Li was quoted by the govern­ment’s main in­for­ma­tion web­site (gov.cn) as say­ing at a meet­ing of the na­tional en­ergy com­mit­tee.

It was un­clear if Li was talk­ing about kick­start­ing projects al­ready in the pipe­line or was an­nounc­ing new projects de­signed to pro­mote eco­nomic ac­tiv­ity.

In­vestors have long steeled them­selves for growth to slow as China’s econ­omy ma­tures, es­pe­cially as the govern­ment tries to steer it away from in­vest­ment- and ex­port-driven growth and to­wards con­sump­tion-led ac­tiv­ity.

Econ­o­mists have re­peat­edly cut their growth fore­casts for 2014, with a Reuters poll show­ing growth is fore­cast at 7.4 per­cent, a shade be­low the govern­ment’s 7.5 per­cent tar­get.

Af­ter the govern­ment an­nounced last week that growth in the first quar­ter was 7.4 per­cent, Li an­nounced a re­lax­ation in re­serve re­quire­ments for ru­ral banks to help the farm sec­tor.

The en­ergy-re­lated projects “will be im­por­tant mea­sures to sta­bilise growth and im­prove en­ergy se­cu­rity ca­pa­bil­i­ties, and an ef­fec­tive start­ing point for the ad­just­ment of the en­ergy struc­ture and chang­ing the mode of de­vel­op­ment”, Li said.

China should, “in a timely man­ner”, launch im­por­tant nu­clear power projects along the east coast that em­ploy the high­est in­ter­na­tional safety stan­dards, while build­ing new hy­dropower plants while pro­tect­ing the en­vi­ron­ment, he said.

China in Oc­to­ber be­gan ap­prov­ing new nu­clear re­ac­tors af­ter a year-and-a-half ban by Bei­jing fol­low­ing the Fukushima dis­as­ter in Ja­pan. Bei­jing aims to bring ca­pac­ity up from 12.57 gi­gawatts to 58 GW by the end of 2020. Nearly 30 GW of new ca­pac­ity is un­der con­struc­tion in China, more than 40 per­cent of the world’s to­tal new-build.

Air pol­lu­tion has be­come a ma­jor con­cern across China and Li said the coun­try would try to boost the de­vel­op­ment of elec­tric cars and up­grade coal-burn­ing power plants that failed to meet emis­sion re­duc­tion re­quire­ments.

Li also said the govern­ment would start con­struc­tion on ul­tra­high volt­age power lines to trans­port power from western re­gions to the power-hun­gry east coast, while ac­cel­er­at­ing the de­vel­op­ment of un­con­ven­tional en­ergy re­sources, in­clud­ing shale gas, shale oil and coal bed meth­ane.

An al­most un­abated run of dis­ap­point­ing data this year has fu­elled in­vestor spec­u­la­tion the govern­ment would loosen fis­cal or mon­e­tary pol­icy more dra­mat­i­cally to shore up ac­tiv­ity.

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