Earlier this month, the National Development and Reform Commission (NDRC) approved a round of investment projects worth more than a combined 1 trillion yuan ($158 billion). Many saw this as a stimulative move, similar to the 4-trillion-yuan package the NDRC launched in 2008.
This interpretation is wholly inaccurate however, since many of the newly approved projects are included in China's 12th Five-Year Plan. They are also strictly planned and designed, unlike many of the hastily thrown-together projects seen in 2009. In this sense, these projects are intended to help China reach its long-term development goals rather than engendering short-term growth.
Most likely the government simply decided to hold off on approving these projects until inflation dropped, as it has done recently. Again, if these projects were orchestrated simply for short-term returns, the government could have launched them as soon as the economy showed signs of slipping.
Based on a speech made by Fan Jianping, the chief economist from the State Information Center.
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