Changsha, a gritty industrial city in central China, has set out a $130bn investment plan that could pave the way for other local governments to launch stimulus programmes as the country’s economic growth slows.
The central government has vowed to avoid a repeat of its mammoth 2009-10 stimulus, which led to soaring debts and inflation. But it has also started to call for more investment to support the economy, opening the door for growth-hungry local governments to unveil ambitious spending targets.
Changsha, capital of Hunan province, is the first to announce a comprehensive plan. Analysts said the move made clear that China’s top priority now was to prop up the flagging economy, which expanded 7.6 per cent, a three-year low, in the second quarter.