China provinces seek slice of stimulus pie

BEIJING - China's provinces have drawn up long wish lists for roads and other projects since the government unveiled its economic stimulus plan, state TV said yesterday, indicating local leaders are rushing to take advantage of a new willingness to spend amid the global economic crisis.

Provincial officials had been under orders the past three years to curb building in an effort to cool an investment boom that regulators worried might ignite a surge in inflation or cause a debt crisis.

Spending proposals announced over the past week by provincial governments totaled 10 trillion yuan, or about $1.4 trillion, China Central Television reported. It provided few details and gave no indication how much the central government might approve.

Beijing's stimulus plan, announced Nov. 9, aims to boost consumer spending to reduce China's reliance on the cooling global export market.

The program is valued by the government at 4 trillion yuan and calls for spending on highways and other construction, social programs, and tax cuts.

The announcement on Nov. 9 electrified Chinese investors and briefly boosted global stock markets ahead of a meeting of leaders last weekend in Washington to discuss a response to the financial crisis.

But as details were released, it became clear the plan included less new spending than initially thought. The key to the national package's success will be its ability to reassure consumers, which makes its emotional impact as important as its actual size and gives Communist leaders an incentive to embellish figures for a dramatic price tag

Although much of spending was already planned before the global slump, provincial leaders are getting in their bids.

"Within a week, the governments of various provinces announced massive-scale investment blueprints," CCTV said. "Based on a rough calculation, the current total investment by all the provinces and cities has already exceeded 10 trillion yuan."

The biggest proposal came from Yunnan province in the southwest, which wants to spend 3 trillion yuan over the next five years, the report said. The booming southeastern province of Guangdong proposed 2.3 trillion yuan in spending.