China to invest more in infrastructure to maintain economic growth

Chinese authorities approved 17 transport infrastructure projects from Oct. 14 to Nov. 14, with a total investment of 353.6 billion RMB. Experts pointed out that investment has become a crucial means of support for China’s economy, and more investment will be poured into infrastructure in the next four months.
 
Recent projects have highlighted the importance of railway construction, with six projects receiving a total of 222.7 billion RMB in investment. The most expensive project, at 64.1 billion RMB, was approved on Nov. 14 and will build a 432-kilometer railway connecting Shenzhen and Ganzhou in Jiangxi province.
 
In addition to railway construction, Chinese authorities have also approved capital investment in highways, metros, airports and sea ports.
 
Downward pressure on China’s fixed-asset investment is the main driver for the country’s massive approval of capital construction. China’s investment in fixed assets (excluding rural households) was trillion RMB in the past 10 months, with a growth of only 8.3 percent.
 
“Due to favorable policies, investment in China is growing steadily, though fixed-asset investment is still facing downward pressure,” said Li Pumin, secretary general of the National Development and Reform Commission, to Thepaper.cn.
 
According to a report from China Securities Journal, infrastructure serves as an impetus for the China’s steady economic growth. Though the yield of capital construction is relatively low, it nevertheless has a positive exterior effect on the country’s investment growth. Meanwhile, China still has a strong demand for infrastructure - especially roads, communication facilities and water conservation projects in rural areas.
 
“More investment will be put into infrastructure in the first quarter of 2017, as this move will stimulate China’s economic growth in the second and third quarters of the year,”said Wang Tao, a chief economist of the United Bank of Switzerland.