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 April 13.
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 April 10.
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.
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.
Exports in yuan-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 April 13.
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 April 13 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.