In an effort to combat slowing economic growth, a handful of major Chinese cities are planning substantial investments. According to the Tianjin Daily, Tianjin has announced it will “preliminarily” complete a four-year, CNY 1.5 trillion ($237 billion) investment plan in 10 industries. According to the Xinhua news agency, Chongqing also intends to spend CNY 1.5 trillion, which it will invest over three years in seven industries, including CNY 300 billion, CNY 250 billion, CNY 200 billion and CNY 150 on electronic communications, advanced equipment manufacturing, the auto industry and chemicals, respectively. Last month, Changsha announced it would invest CNY 829.2 billion. The time frames of the plans are ambiguous because Chongqing also announced a CNY 1.5 trillion investment in 2011. The source of the funds for the plans is also unknown. Chinese banks supplied most of the loans for local governments during the 2009–2010 stimulus but are now more regulated. Some analysts believe that the investment plans could result in overcapacity but will likely improve slowing growth.

Source: The Wall Street Journal