China's improved rural power network feeds investment

With decrepit facilities and frequent repairs, power cuts were nothing out of the ordinary in Diqing Tibetan Autonomous Prefecture in southwest China's Yunnan Province.

For travelers, a visit to the region of mountains, lakes and the famous Shangri-la tourist destination, might be some sort of fun, but for those who live here, the unreliable power supply was a major headache. Power outages in some areas could last from morning till evening.

The local power company used to frequently schedule power cuts due to repairs, but the situation has improved markedly in the last decade. China Southern Power Grid (CSG) has spent 2.8 billion yuan (458 million U.S. dollars) on better facilities including new power nets, voltage transformers and ultra-high voltage transmission lines. The time of outages have declined by more than 78 percent and more than 7,000 locals who previously had no access to electricity are now plugged in.

These upgrades in this remote region epitomize broader work on the power network taking place across the nation. The CSG announced last month that it would spend 1.63 billion yuan over the next five years on supplies to 399 impoverished villages in Yunnan, benefiting 800,000 people. In central China's Hubei Province, the State Grid plans more than 13 billion yuan of upgrades in rural and suburban areas.

The central government is spending big on rural power networks. Power grid work is high on the rural agenda because it does not just improve people's lives, but sustains infrastructure investment and boosts growth. The National Energy Administration announced on July 7 that it would spend 92.6 billion yuan this year on upgrades, with 20 billion yuan coming from fiscal funds and the rest financed through bank loans.

The State Grid announced earlier this month that it would invest another 67.4 billion yuan on upgrades this year, thereby increasing industrial output by 470 billion yuan and creating more than three million jobs.

China sees infrastructure investment as a route to growth. The Shanghai Securities Journal reported on Monday that nearly 900 billion yuan worth of investment on roads, railways, airports and other infrastructure projects were approved by the National Development and Reform Commission in the first half of 2015.