High interest rates can check investment spree

A mammoth investment campaign has been launched in China as a preferred weapon for tackling economic slowdown amid the global financial crisis.

The Chinese government recently gave the green light to quite a few high-speed railway lines, which will mark the country as having the longest high-speed railway mileage in the world by 2012. The enthusiasm in the field has also been rising in a number of local regions. Jiangsu province is reportedly planning to start 11 subway lines very soon and related construction is under way in 14 cities across the country. Large-scale, light-rail projects are also being planned in another 18 cities.

Some Chinese experts attribute the country's accelerated investment in infrastructure to its enormous deposits. They believe there is no more suitable channel for China to invest its savings than in infrastructure. In saying thus, they turn a blind eye to the basic fact that ordinary Chinese people have long endured expensive public services, high taxes and low interest rates.