China Announces Largest Infrastructure Projects

China ruled out government stimulus to slow economic growth, but at the same time announced a $ 260 billion infrastructure project, including the construction of a railroad.

According to Premier Li Keqiang's report to the National People's Congress, China is set to invest more than CNY 800 billion in railway construction this year, while investments in large water projects will exceed that amount. China will also increase the efficiency of investment in public services.

Li Keqiang noted that the 8,000 km railroad will be open to traffic this year, and construction on 57 ongoing large water conservancy projects should be accelerated, adding that 27 new projects will begin this year. He clarified that China already has 16,000 km of high-speed railways, which accounts for 60 percent of the world's total.

Additional investments will be aimed at increasing the supply of public goods and services, including information technology, railway and hydraulic projects, in particular in new hydraulic cylinders for rolling stock, as the world's second largest economy still lags behind industrialized countries in infrastructure construction. China plans to avoid investment-led economic growth and instead wants consumption to drive growth.

China cut its forecast for gross domestic product growth by half a percent in 2015 to about 7 percent, after the economy recorded a 7.4 percent expansion last year, the lowest in 24 years.