China will expand effective investment in order to boost demand, foster high-quality development, and stabilize the overall economy. China's gross domestic product (GDP) increased by 4.8% in the first quarter. Analysts said they are expecting more growth-boosters such as increasing infrastructure investment, further tax reductions and increasing support for hard-hit enterprises and sectors. Ou Hong, Director of the Department of Fixed Asset Investment at the National Development and Reform Commission (NDRC), said a big push will be made to bolster investment in infrastructure construction, manufacturing and high-tech industries and shore up weak links in areas that are important to people’s lives. He told a news conference in Beijing that the NDRC will promote infrastructure construction in fields like water conservancy, transportation and energy, accelerate the push for “new infrastructure” construction, spur investment in equipment manufacturing and boost the development of sectors like health, education, elder care and nursery services.
Despite facing pressures from resurgent domestic Covid-19 cases, Ou said China has favorable conditions to stabilize investment. He cited China’s plan to issue CNY3.65 trillion worth of special-purpose bonds for local governments in 2022 and the CNY1.2 trillion worth of special local government bonds issued in the fourth quarter of last year, saying they provide strong support for the growth of investment this year. “China still has plenty of scope for expanding investment in various fields like infrastructure construction, strengthening weak links, pushing forward with carbon peaking and neutrality projects, emerging sectors and new urbanization,” Ou said.
The NDRC has so far approved 32 fixed-asset investment (FAI) projects worth CNY520 billion, mainly in fields like transportation, water conservancy, energy and high-tech sectors. Ou urged steps to encourage the private sector’s participation in 102 key projects mapped out in the 14th Five Year Plan (2021-25). Luo Zhiheng, Chief Economist at Yuekai Securities expects more monetary and fiscal stimulus measures from policymakers to boost investment in infrastructure construction and manufacturing as well as credit growth, the China Daily reports.
