China may cut spending on strategic industries
Updated: 2011-07-08 09:48
BEIJING - China may rein in plans to invest heavily in seven new strategic industries, including high-speed rail and wind power, scaling back cutting-edge projects for industries suffering from old-fashioned problems such as corruption and overcapacity, sources said.
China originally planned to invest up to $1.5 trillion over the next five years in the seven sectors, hoping they would grow into a pillar of economic growth and help shift the world’s second-largest economy away from one centered on manufacturing cheap goods.
The pullback on spending stems partly from worries about the country's high-speed rail project and overcapacity concerns in the wind power sector, said two sources with ties to China's Communist Party leadership and knowledge of the plan.
Beijing has long used infrastructure spending to generate jobs and economic activity, most recently tapping government coffers to stave off the effects of the global financial crisis.