China is to accelerate construction of urban public facilities by investing as much as seven trillion yuan ($1.03 trillion) during its 12th Five-Year Plan from 2011 to 2015, the 21st Century Business Herald reported Thursday, citing chief economist from the country's urban planning body.
Municipal facilities lag behind China's urban development, as the rapid urbanization process leads to an explosion of the urban population, said Li Bingren, chief economist of the Ministry of Housing and Urban-Rural Development (MHURD). Li also expects fixed-asset investment on urban infrastructure to top 1 trillion yuan in 2010.
The MHURD estimates that investment on urban rail transit to surpass 700 billion yuan in the 12th Five-Year Plan period.
Aside from urban infrastructure construction, China will also invest heavily on transportation and rural infrastructure in the next five years.
It needs to invest three trillion yuan on railway construction, and 3.05 trillion yuan on rural infrastructure construction, according to the investment institute of the National Development and Planning Commission (NDRC), China's economic planning agency.
The length of China's railway in service is to reach 120,000 km by 2010, with lines for passenger transportation reaching 16,000 km at that time, according to An Guodong, vice chief-engineer of the Ministry of Railways.
China's fixed asset investment may grow 16.2 percent during the twelfth five-year plan, down from the 24.7 percent in the previous five years, according to the NDRC' institute of macro-economics. It said government investment will rise to about 9.57 trillion yuan, or 5.2 percent of the total investment.
A United Nation Development Programme research said for a developing country, urban infrastructure should take 10 to 15 percent of the country's total fixed asset investment, or three to five percent of its GDP.
As for China, urban infrastructure investment accounted for six percent of the fixed asset investment on average from 1994 to 2006, and averaged 2.6 percent of the GDP during the same period, according to the paper.