The Chinese government has announced a massive £500 billion government spending programme on roads and railways, to be partly financed from the international money markets.
The Vice-Premier of China, Mr Li Lanqing, told a meeting at the World Economic Forum here that the government plans to invest $750 billion (£500 billion) over the next three years.
The money, he said, will be spent on the construction of railways and highways, on the development of high-tech industries and on housing developments and the development of China's impoverished mid-west regions.
The announcement is a signal of China's deepening integration with global politics and economics and opens huge opportunity for foreign investors to profit from the Chinese economy.
Mr Li said China would seek to achieve annual gross domestic product growth of 8 per cent during the period. The massive public sector investment would "generate expansion of employment and consumer demand," he said.
Mr Li also set out China's stall in its attempt to join the World Trade Organisation (WTO), a further signal of its desire to become part of the international economic system. Stressing that China will do its best to help the rest of Asia out of crisis, Mr Li insisted that China will not devalue its currency, the yuan. Such a move, he said, could have an "avalanche effect, resulting in a vicious cycle" of devaluations of the currencies of its Asian neighbours.
That would be a disaster for stability and growth in Asia and the growth of the world economy, he said. "China should not add fuel to the flames. We are very firm in our determination not to devalue the yuan." To date the yuan has been a strong stable force in the region.
Financial analysts say a yuan devaluation might be seen by Southeast Asian countries as a move to promote China's exports at their expense and trigger a speculative attack against their currencies.
In a forceful speech stressing China's new outward-looking ethos, Mr Li said the money for the huge investment programme will come from a combination of sources - improved tax collection and reduced government spending; taking advantage of China's huge savings; and the issuing of government and corporate bonds. The government is also planning to attract increased foreign investment through a relaxation of regulations. Mr Li did not say how much funding he expected from each source.
The move into the bond market is seen as copper-fastening China's entry into the capitalist system and will be welcomed by Western governments.
According to Mr Li, the move means the next century will be one of "global co-operation and prosperity. China's reform and restructuring will be even more positive and will further integrate us into the broader global economy. And China will make its contribution towards the maintenance of world peace." He insisted that China will co-operate with Asia, and all will emerge better and stronger.
Mr Li also repeatedly stressed the need for the WTO to grant it entry. Pointing to the decision not to devalue and China's refusal to implement protective measures, he insisted that a positive decision is needed soon.
"If not, there could be a trade war or trade protectionism, which would benefit nobody," he said. "I believe China needs the WTO and the WTO needs China."
Sir Leon Brittan, the vice-president of the EU Commission and the man responsible for the EU negotiating team looking at China's entry into the WTO, insisted that a number of conditions have yet to be met.
Nevertheless, he added, he expects a positive decision this year if the political momentum keeps up. However, he said, entry to the WTO cannot be achieved as a political favour and China still has some work to do.
