Feb. 25 (Bloomberg) -- China’s fiscal stimulus plan may be doubled over the next three years, creating an investment boom similar to the one triggered by Deng Xiaoping in the early 1990s, said Sun Mingchun, an economist with Nomura International.

The increased stimulus spending, which could reach “seven or eight trillion yuan” from the original four trillion yuan ($585 billion), would come from additional programs launched by the central and provincial governments, said Sun, who was speaking at a conference in Beijing today.

China’s growth has slowed for six straight quarters on falling export demand and a sagging property market, putting pressure on the government to add to stimulus spending and five interest-rate cuts last year. Stimulus spending and a surge in bank lending in December and January would fuel growth of at least 8 percent this year, said Sun.

“This may be a harbinger of another investment boom,” he said. “The only similar big encouragement made by the central government was by the late leader Deng Xiaoping and thanks to that the economic situation took a big turn for the better.”

China will easily maintain investment growth at 15 percent to 20 percent this year, said Sun, and could maintain its 8 percent growth target this year. That target could also be maintained “in the coming 10 years” because of its strong fiscal situation, its $1.95 trillion in foreign reserves, high savings, and because some 600 million rural dwellers will migrate to the cities, creating “great demand for consumption.”

Deng’s early 1992 tour of southern China launched the nation on several years of rapid growth that caused inflation to peak at 24.1 percent in 1994.

The value of China’s new loans in January was more than double the record set a year earlier, after the central bank removed lending quota late last year and encouraged lenders to back the government’s economic stimulus projects.

To contact the reporters on this story: Kevin Hamlin in Beijing on khamlin@bloomberg.net.

Last Updated: February 25, 2009 08:36 EST