China to stimulate economy with energy investments

The need to restore growth to its economy is pushing China to launch projects that will draw private investments.

Beijing said it will launch projects to attract private investment in energy and other industries as it tries to reverse an economic slump that threatens to worsen further.

The International Monetary Fund said recently that China probably achieved a soft landing in the second quarter but warned global headwinds are increasing due to the Eurozone debt crisis and a weak U.S. recovery.

“We will launch demonstration projects in such fields as railways, city government, energy, telecoms, finance, health and education to draw private investment into these areas,'' the government said in a statement to the media. It gave no details of individual projects or how much the government might spend, however.

Beijing has said that boosting private sector investment is a key part of its recovery plan but there is no sign struggling entrepreneurs are willing to spend. Some entrepreneurs say monthly sales have fallen by up to 50% in recent months.