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China launches green subsidies to spur investment in hinterland provinces
[BEIJING] China is to provide subsidies of up to 60 per cent for some "green" investment projects in the Yangtze River Economic Belt, the latest measure to underpin growth while spearheading an anti-pollution drive.
The subsidies will be given to projects that address significant environment problems along the river, as well as transport projects that help to connect river ports to railways and roads, the National Development and Reform Commission (NDRC) said in a notice on its website on Wednesday.
The plan will cover projects in 11 provinces in the Yangtze River Economic Belt, but the commission said it would in principle only implement the plan in eight of them, mainly in central and western China, including Anhui, Jiangxi, Hubei, Hunan, Chongqing, Sichuan, Guizhou, and Yunnan.
The plan takes effect immediately and will be valid until the end of 2020.
The subsidies will vary according to the project.
For example, subsidies for water treat projects of the Yangtze in central provinces will be capped at 45 per cent of the project's total investment value, while the upper limit will be 60 per cent in poorer western provinces.
In absolute investment terms, a subsidy will not be allowed to exceed 100 million yuan (S$20 million) per project, the NDRC said.
The investment projects submitted to the government to qualify for the subsidies should not cause "hidden debts" for local governments and strain local finance capacity, the NDRC said.
"Local governments will design reasonable local government investment tasks and projects, and strictly control the scale of government construction investment in high-risk areas," it said.
Policymakers have acknowledged the economy is under pressure as multi-year debt and pollution crackdowns have deterred investment, while a trade dispute with the United States is hurting exporters and their domestic supply chains.
In response, the government has announced more spending on roads, railways and ports, along with trillions of yuan of tax cuts to ease pressure on corporate balance sheets and avert a sharper slowdown.
State-controlled banks are also being urged to maintain lending to companies that are struggling.