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There is still huge potential for infrastructure investment.

2018-05-17


The continuous slowdown in the growth rate of infrastructure investment in China is not only related to the relatively high year-on-year base, but also due to the objective law of economic operation, which has a limited impact on economic growth. In the medium and long term, China's infrastructure investment still has huge space and potential. We should continue to deepen the reform of the investment and financing system, give full play to the key role of investment in optimizing the supply structure, and constantly optimize investment in the field of infrastructure.

The continuous slowdown in the growth rate of infrastructure investment in China is not only related to the relatively high year-on-year base, but also due to the objective law of economic operation, which has a limited impact on economic growth. In the medium and long term, China's infrastructure investment still has huge space and potential. We should continue to deepen the reform of the investment and financing system, give full play to the key role of investment in optimizing the supply structure, and constantly optimize investment in the field of infrastructure.

According to data released by the National Bureau of Statistics on May 15, in the first four months of this year, my country's infrastructure investment increased by 12.4 year-on-year, 0.6 percentage points slower than the first quarter and 10.9 percentage points slower than the same period last year.

Investment is a key factor driving economic growth. For a long time, infrastructure investment has played a very important role in China's economic growth. As the growth rate of infrastructure investment continues to slow down, many people are worried that it will affect the process of making up for shortcomings and adversely affect the stable trend of the macro economy.

In fact, as China's economic development enters a new normal, economic growth has shifted from high-speed growth to medium-to-high-speed growth, from extensive growth based on scale and speed to intensive growth based on quality and efficiency, and from factor investment-driven to innovation-driven. The speed shift, structural adjustment and kinetic energy conversion characteristics of China's new economic normal will inevitably leave a deep mark on fixed asset investment, especially infrastructure investment.

On the one hand, as economic growth shifts from double-digit high-speed growth in the past to medium-to-high-speed growth, investment growth is bound to shift accordingly. This is because, over the past 40 years of reform and opening up, China has continued to carry out large-scale investment and construction, and the scale of investment in the field of infrastructure has been very huge, and its investment growth rate can no longer maintain a growth rate of more than 20% as in the past. In this sense, the gradual slowdown in the growth rate of infrastructure investment is an external manifestation of the shift in economic growth, and it is also in line with the objective laws of economic operation.

On the other hand, in the long-term infrastructure investment, my country has concentrated a large amount of funds on railways, highways, airports and other fields. The investment in these fields requires a large scale of funds, and the investment in related fields has obvious driving effect. After years of investment and construction, in some relatively developed areas, the stage of large-scale investment in infrastructure has been basically completed. Instead of "flooding", we should pay more attention to improving investment efficiency, which is also an inevitable requirement for the pursuit of high-quality development. At the same time, in some relatively backward areas, although investment in infrastructure is still in the stage of large-scale investment and development, it also needs to be steadily promoted, and it is impossible to "eat a piece of steamed bread into a fat man". Moreover, in the investment process, we must learn from the experience and lessons of developed regions to avoid blind investment and repeated construction due to the pursuit of speed and scale.

In addition, in accordance with the requirements of the three major battles, the relevant departments have taken measures to further standardize the clean-up of PPP projects and regulate local debt financing behavior. These measures will also have an impact on infrastructure investment growth in the short term.

It can be seen that the continuous slowdown in the growth rate of my country's infrastructure investment is not only related to the relatively high year-on-year base, but also due to the objective laws of economic operation. It is worth noting that although the current growth rate of infrastructure investment is slowing down, it still remains above double digits, which is a relatively fast growth rate. Moreover, the fundamental role of consumption in China's economic growth has been increasing in recent years, with the contribution of final consumption expenditure to economic growth reaching 77.8 per cent in the first quarter of this year, 46.5 percentage points higher than the contribution of gross capital formation. Therefore, the current slowdown in infrastructure investment growth has limited impact on economic growth.

In the medium and long term, China's infrastructure investment still has huge space and potential. China is a large developing country in the world, and it is still in the stage of rapid development of industrialization and urbanization. There are still many shortcomings in the fields of transportation, water conservancy, energy, information, pipe network and other infrastructure, and the problem of unbalanced and inadequate development is still more prominent. Relevant data show that at present, the per capita capital stock of infrastructure in China is only 20% to 30% of that of western developed countries, and the gap between the infrastructure stock in some poor areas in the west and that in the east is also relatively large, which is only about half of the national average.

These shortcomings and gaps are the focus of future shortcomings. Therefore, we still need to thoroughly implement the spirit of the 19th CPC National Congress and the decisions and arrangements of the Central Economic work Conference, highlight key points, make up for weaknesses, and continue to deepen the reform of the investment and financing system. we will give full play to the key role of investment in optimizing the supply structure, constantly optimize investment in infrastructure, and overcome emerging new problems and contradictions. We will strive to create a solid foundation for national economic development and the improvement of people's living standards.

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