China Eyes Investments in Infrastructure to Boost Economy, Asian Stocks Up

Companies engaged in producing raw commodities, particularly coal, iron ore and copper, may look to sunnier skies as China jumps to apply solutions to control its slowing economy. Specifically, the country is looking to the infrastructure sector to lead this economic rally, state-backed newspaper China Securities Journal reported on Tuesday.

According to the newspaper, Beijing had already started pursuing and working, including fast tracking approvals on project proposals on its infrastructure sector that were initially reserved for the end of 2012. From the way it looks, approvals for infrastructure investment will be approved much more quickly this year compared from the last two years.

Even the release of budget allocations on various constructions that include highway construction will likewise be sped up.

And if needed, Beijing will also work on investment projects meant for 2013 if only to ensure China's economy is amply stimulated, the Chinese state-backed newspaper reported.

This development, along with the commitment of Chinese Premier Wen Jiabao over the weekend to work on new measures to bolster the country's growth, effectively boosted Asian stocks on Tuesday.

Japan's Nikkei 225 index jumped 1 per cent to 8,722.46, while the Kospi of South Korea's edged 1.2 per cent to 1,821.62. Hong Kong's Hang Seng likewise improved 1 per cent to 19,117.54. Australia's S&P/ASX 200 grew 0.7 per cent higher at 4,102.10. Other benchmarks in mainland China, New Zealand, Singapore, Taiwan and Indonesia also improved.

It also helped improved the day's performance of infrastructure-related stocks on the China Enterprises Index of Chinese companies, including China Railway Group, China Railway Construction Group Corp, Anhui Conch Cement, China Communications Construction and Zoomlion Heavy Industry.

Financial markets, pressured already from the negative developments in the euro zone, went agog as China's economic data in April implied the world's second-biggest economy was bound for a sixth straight quarter of slowing growth.

The situation has prompted Chinese trading houses to suspend cargo shipments of coal, iron ore and copper.