Sharp rise in power project investment

China has sped up the approval of power projects recently, with projects worth over 15 billion yuan ($2.38 billion) approved in the last two weeks, a move that is intended to spur the economy, analysts said Tuesday.

Following its approval of eight power projects worth a total of 11.4 billion yuan last week, the National Development and Reform Commission (NDRC), the country's top economic planner, gave the green light Monday to another eight power projects worth 4.3 billion yuan in total.

It is the first time this year the NDRC has given such strong backing to power projects.

The projects approved Monday are mainly in Central China's Hunan Province and East China's Shandong Province. They include expansion of transformer substations and construction of power transmission and conversion projects.

"The economy has been slowing since the beginning of the year, and as a result power grid and substation investment and construction have also slowed down," Dai Bing, an analyst with JYD Online Co, a Beijing-based bulk commodity consultancy, told the Global Times Tuesday.

"But as the slowdown in the economy has been gradually bottoming out in the last two months, the government is speeding up power projects to further aid the economy. And as the economic recovery gathers steam, it will inevitably lead to increasing demand for power," Dai said.

China's official manufacturing Purchasing Managers' Index (PMI), a gauge of performance in the manufacturing industry, rose to a seven-month high of 50.6 in November from 50.2 in October, confirming a trend toward recovery.

"Construction of the power transmission and conversion projects will take two or three years. By approving these projects now, the government intends to prepare for higher power demand in the next few years. It's also a way to avoid the power shortages seen in previous years," Han Xiaoping, chief information officer of China Energy Net Consulting Co, told the Global Times.