Effective investment seen as key to growth
A construction site of the Jinhua-Jiande High-speed Railway, which is being partially built by China Railway 24th Bureau Group Corp Ltd, a unit of State-owned enterprise China Railway Construction Corp. [HU XIAOFEI/FOR CHINA DAILY]
Government investment in infrastructure will be more effective this year and is expected to inject more impetus into projects that play key roles in supporting livelihoods and remote areas nationwide, experts said.
The comment came after the Ministry of Finance recently announced the nation's fiscal data for the first two months of this year.
China's fiscal revenue dropped 1.2 percent year-on-year in the first two months, while its fiscal spending expanded 7 percent year-on-year, the ministry said.
Combined spending on four infrastructure-related sectors — agriculture, forestry and water affairs; energy conservation and environmental protection; urban and rural community affairs; and transportation — rose 3.1 percent year-on-year during the period. It's a figure higher than that in December but relatively lower compared to the overall growth rate of 7 percent, Zhong Zhengsheng, chief economist at Ping An Securities, said in a note to the China Chief Economist Forum.
"Due to support, including the issuance of special bonds and use of financial tools serving development and policies, the pressure weighing on infrastructure nationwide has been eased, leading to less fiscal spending to this end," Zhong said.
Surges of spending in areas related to people's livelihood unveiled the main direction for fiscal spending this year, he added.
Accelerated progress has been seen in many projects nationwide recently, especially those related to livelihoods, and the ones which are expected to generate long-term benefits.
China Railway 24th Bureau Group Corp Ltd (CR24), a unit of State-owned enterprise China Railway Construction Corp, said its team working on the metro project in Hefei, Anhui province, has recently completed a breakthrough ahead of schedule, with the tunneling work for the right-side rail between the Science Avenue Station and Huaining Road Station completed.
With a length of 1.66 kilometers, the tunnel is the latest milestone achieved on Hefei Metro Line 6 — a key urban rail project in the provincial capital, CR24 said.
The rail, which has a maximum designated speed of 100 kilometers per hour, aims to facilitate urban trips in the city and bring convenience to residents as the line is linked to the local railway station, it added.
"The construction has gathered much speed since this year, as the team managed to leverage more resources thanks to various support and enjoyed the benefits brought by smoother transportation due to the optimization of COVID measures," said the CR24 project manager, who declined to be named.
The team also recruited more construction workers and organized training this year for faster progress of the urban metro project, the manager said.
In Zhejiang province, another rail project partially undertaken by CR24 — the Jinhua-Jiande High-speed Railway — also reported a big leap forward, as the builders managed to dig through both lanes of the Mache Tunnel on the railway.
Connecting the three cities of Jinhua, Lanxi and Jiande with China's major railway network, the high-speed railway, which is scheduled to open before October 2025, aims to help cities further develop tourism attractions and provide a faster link between Zhejiang and inland provinces.
The budget report for this year unveiled during the two sessions said local governments should focus on the performance of government investment and avoid blindly expanding investment, indicating the government's tightening grip over the effectiveness of infrastructure investment this year to curb potential risks behind last year's surge, according to an analysis by Shenwan Hongyuan Securities.
Liu Yuanchun, president of Shanghai University of Finance and Economics, said during an interview with Guancha.cn, an online news and comments aggregator, that effective investment is expected to play an increasingly important role in boosting the nation's economy and livelihoods. More focus should be given to its strategic significance to overall development, instead of merely short-term profits.
Urging for more effective investment by local governments is a key move for the nation to see more real benefits from their fiscal spending, Liu said.
Citing figures from the National Bureau of Statistics, which said fixed-asset investment increased by 5.5 percent year-on-year in the January-February period, compared with a 5.1 percent rise for the whole year of 2022, and investments into projects valued at more than 100 million yuan ($14.5 million) or more surged 13.1 percent annually, Guan Tao, global chief economist of BOC International, said the driving force of infrastructure this year is still significant. Investments, especially those into big projects and infrastructure, remain a key focus amid the nation's efforts to expand domestic demand.