By staff reporter Zhang Hong

From Caijing Online

China's newly released 4 trillion yuan economic stimulus package is set to boost economic growth by 1 percent each year until 2010. About half of the funds will be funneled to transportation infrastructure and power grid construction projects, according to China's top economic planner.

Zhang Ping, director of the National Development and Reform Commission (NDRC), said at a November 27 press conference that 1.8 trillion yuan of the total package will be invested into transportation infrastructure and power grid construction. One trillion yuan will be used for reconstruction in areas affected by the May earthquake, and 370 billion yuan will target improving rural livelihoods and infrastructure. Another 350 billion yuan is earmarked for environmental protection, while social security and housing will receive 280 billion yuan. Technological innovation will get 160 billion yuan, and 40 billion yuan will be spent on public healthcare and education.

Efforts to improve quality of life and rural development have been given top priority.

“There won’t be a penny spent on enlarging mass production, or highly-polluting and resource-intensive sectors,” Zhang stressed, adding that the 4 trillion yuan is only part of the overall social investment that the package could spur.

According to Zhang, China's overall investment in fixed assets is set to reach 17 trillion yuan this year and could top 20 trillion yuan next year.

The government plans to increase fourth quarter investments by 100 billion yuan this year. "More than 40 percent of the investment fund has been allocated to projects," Zhang said.

Along with the stimulus package, China’s government has emphasized domestic consumption as a key to maintaining long-term, sustainable growth. According to Zhang, the NDRC is considering a series of measures to boost domestic spending –  such as raising the minimum wage, increasing employment, improving China’s social welfare system, and increasing farmers' income.

Zhang also stressed that the government will keep a close eye on how money from the stimulus package is used. The central government has set up 24 inspection teams that will monitor the projects across China funded by the stimulus package, said Zhang.