China Raises 2012 Rail Investment 9% to $70 Billion, NDRC Says

China is boosting this year’s railway infrastructure investment plan by 9 percent to 448.3 billion yuan ($70.3 billion), according to a provincial office of the National Development and Reform Commission.

The previous plan was for spending of 411.3 billion yuan, according to a statement dated July 6 on the website of the Anhui branch of the NDRC and citing the Ministry of Railways.

China’s fixed-asset investment has already started to pick up and a jump in spending on railway construction would echo stimulus rolled out during the global financial crisis. Premier Wen Jiabao warned that the nation doesn’t yet have the momentum for a stable recovery after growth slowed in the second quarter to the weakest pace in three years, the official Xinhua News Agency reported yesterday.

“China’s stimulus may be stronger than the market has expected,” Zhang Zhiwei, Hong Kong-based economist for Nomura Holdings Inc., said. “There will be more positive signs in the coming months to confirm that China’s pro-growth policies are taking effect.”

The China Securities Journal reported today that the State Council may hold as meeting as early as July 18 to set the tone for monetary and fiscal policies. The economy grew 7.6 percent in the second quarter from a year earlier.

“It should be clearly understood that the momentum for a stable rebound in the economy has not yet been established,” Wen said during an inspection tour in southwest Sichuan province, according to a Chinese-language report from the official Xinhua News Agency yesterday.

In a sign of stresses in the Chinese economy, more than 2,000 Hong Kong-owned factories in China’s Pearl River Delta may close this year as export orders fall and wages rise, a business association said today.

Stanley Lau, deputy chairman of the Federation of Hong Kong Industries, gave the estimate in a phone interview after Ming Pao Daily earlier reported his comments. The organization’s members have garment, watch, toy and footwear factories in the export hub of Guangdong.