Chinese city, SOEs reach massive investment deals

The city of Xuzhou in eastern China's Jiangsu Province on Friday signed a package of investment agreements worth 33.7 billion yuan (5.31 billion U.S. dollars) with centrally administered state-owned enterprises (SOEs) to stimulate the local economy.

The package was part of 85 major projects city officials discussed at a forum in Beijing, in the hope of attracting more than 130 billion yuan of investment from SOEs.

According to the agreements, the China National Offshore Oil Corp., China National Machinery Industry Corp., Shenhua Group Co., Ltd. and other SOEs will invest 33.7 billion yuan in the city, launching solar power generating, natural gas-fueled power plants, dairy processing, farming and affordable housing projects.

Xuzhou, which has a population of 9.76 million, has in recent years strengthened its cooperation with major SOEs which have an abundance of cash.

Before signing the new investment agreements, the city had already attracted 40 billion yuan of investment from 20 centrally administered SOEs.

As the Chinese economy expanded at its slowest pace in three years during the first half of 2012 due to sluggish external demand, governments at all levels in China have recently stepped up their efforts in increasing public spending and wooing investment to spur a slowing economy.

Over the past two days, the National Development and Reform Commission, China's top economic planner, approved 55 investment projects worth 1 trillion yuan (157.7 billion U.S. dollars) to build highways, ports and railways across the country.