Government to spend £9.3bn in next three months alone on housing, infrastructure and rebuilding earthquake-affected communities

The Chinese government has announced a massive infrastructure spending programme as part of a £374bn financial recovery package.

In the next three months alone, 400bn yuan (£37.5bn) will be invested in 10 areas, including housing, rural infrastructure and rebuilding communities devastated by May's earthquake.

Around 20bn yuan will be brought forward from next year's disaster reconstruction budget, the government said.

Announcing the decision yesterday, the state council said: “Over the past two months, the global financial crisis has been intensifying daily. In expanding investment, we must be fast and heavy-handed.”

Under Beijing's proposals, taxes will also be cut and credit conditions loosened in a bid to stimulate the country's economy. The International Monetary Fund expects China's GDP to grow by 9.7% this year, down from 11.7% in 2007.