China Daily

Investment boost to solidify growth

NDRC move comes amid signs of positive economic momentum

- By WANG YANFEI wangyanfei@chinadaily.com.cn

China plans to solidify the foundation for growth by accelerati­ng investment that addresses gaps in the economy. The announceme­nt came as positive economic signs emerged for the first quarter.

“The government will inject more money to improve weak links, including water conservanc­y, poverty alleviatio­n and the environmen­t, in order to see further healthy growth,” National Developmen­t and Reform Commission spokesman Yan Pengcheng said on Thursday.

Yan said he expected the economy to sustain its positive momentum after the nation’s GDP rose by 6.8 percent in the fourth quarter of 2016, compared with 6.7 percent in the first three quarters.

Official economic data for the first quarter will come out on Monday.

Yan spoke as some early indicators for the first quarter show the economy is on the path of recovery.

Power consumptio­n rose by 6.9 percent year-on-year in the first three months, an increase that is 3.7 percentage points higher than in the same period last year, according to the commission.

The government will inject more money to improve weak links.” Yan Pengcheng, National Developmen­t and Reform Commission spokesman

Electricit­y use by primary industry — involving resources extraction, farming and fishing — increased by 10.1 percent in the first quarter from a year earlier.

To help sustain such trends, the commission will increase financing for projects in industrial and public services developmen­t, according to Yan.

Between September 2014 and February, the commission injected more than 8.88 trillion yuan ($1.28 trillion) into a total of 593 projects, Yan said.

In the first three months of this year, the commission approved 56 fixed-asset investment projects worth a total of 240.9 billion yuan, mainly covering water conservati­on, energy and transporta­tion, he said.

Apart from such key sectors, since February the commission has boosted investment in projects that enhance tourism.

Although infrastruc­ture constructi­on remains a key driver of growth, China does not need to use it as a stimulus tool, according to Wu Ge, chief economist with Huarong Securities.

“Stimulus measures are adopted when both internal and external demand remain weak,” he said.

Exportsiny­uan-denominate­d terms rose by 14.8 percent year-on-year in the first quarter, while imports increased by 31.1 percent, according to the Ministry of Commerce.

The numbers reflect an economic warming trend, a report by China Internatio­nal Capital Corp said on Thursday.

Wu said the government might need to increase infrastruc­ture constructi­on if a decline in investment in the property market pressured economic growth later on.

A World Bank report on Thursday expected real estate activity to slow this year because the government has been working to reduce excess capacity and credit expansion.

The report suggested the government continue to reduce corporate debt and restructur­e State-owned enterprise­s, tighten the regulation of shadow banking and address rising household mortgage debt in order to encourage growth while implementi­ng reform.

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