China To Spend Nearly $22 Billion To Expand Railways In Northern Coal-Rich Province

December 7, 2008 1:21 p.m. EST

Beijing, China (AHN) - China said Sunday that it will invest more than 150 billion yuan ($21.9 billion) in its northern coal-rich Shanxi Province by 2015 in an effort to reduce congestion and increase railway transport system in the region, the country's state-owned media reported.

The government is expected to increase rail tracks of 3,300 km (2,050.50 miles) to 5,300 km (3, 293 miles) in Shanxi, which accounts to one-third of China's coal output, according to the official Xinhua News Agency.

Citing the officials from the Ministry of Railways and the province, the report said that the government is trying to expand railway as well as trying to create jobs in the region as the world deals with financial meltdown.

The country has also been trying to bridge gap between the rural and urban income has increased over the last 30 years due to capitalist market policies.

Last month, Chinese government announced around 4 trillion yuan ($586 billion) economic stimulus package for over the next two years to revitalize the world's fourth largest economy.

The main focus of the stimulus plan is to finance programs in 10 major regions of the country to bolster its low-income housing, rural infrastructure, water, electricity, transportation, the environment and technological innovation.

This year, the country has expanded at the slowest pace recorded in five years on annual basis in the third quarter, dropping to 9 percent from the year earlier period. In 2007, China's economy contributed up to 27 percent of world's gross domestic product.

Today's annoucement is important as it is expected to boost domestic demand of resources. The construction will start in the first half of the next year on at least three new rail lines, the Xinhua said.

The province would be able to ship the coal output directly to coastal ports in Shandong Province with the construction of a new track in the mid-southern part of Shanxi, according to the report.