Fixed-asset investment to soar amid new stimulus
By Wang Yanlin |
August 9, 2012, Thursday
|
Print Edition
Print Edition
FIXED-ASSET investment may surge in the coming months in the aftermath of local governments rolling out a slew of massive investment plans to revive the economy.
Calling it stimulus 2.0, analysts now expect total investment to surpass the 4 trillion yuan (US$635 billion) that the central government spent in the past four years to save the country from the global financial crisis in 2008.
"Policy stimulus will pick up, and investment growth may surprise on the upside in the second half," said Zhang Zhiwei, an economist at Nomura.
The National Bureau of Statistics is scheduled to unveil the January-July investment growth figures today, along with some other key economic indicators, including industrial production, retail sales and consumer prices.
Investment expenditure, especially on infrastructure construction, has become an key card that Chinese authorities play to drive the economy, said Lu Zhengwei, chief economist at the Industrial Bank.
Lu said fixed-asset investment will expand 20.4 percent from a year earlier in July, up from June's advance of 20.1 percent.
China has shifted its policy tone from the previous emphasis on domestic consumption as the growth engine to "maintaining reasonable investment" to boost domestic demand, Premier Wen Jiabao said last month during an inspection tour of Jiangsu Province.
Shaanxi Province took the lead by unveiling plans on stabilizing the economy, and has hastened approval for a batch of key projects and the construction of coal transport facilities.
Other cities, including Guangzhou, Ningbo, Nanjing and Changsha, followed suit by announcing various policy stimuli.
During the past two months, local governments have announced investment plans whose value is approaching 4 trillion yuan, reports said.
"These initiatives by local governments reinforce our view that Chinese economic growth in the second half will rebound," Nomura's Zhang said.
Calling it stimulus 2.0, analysts now expect total investment to surpass the 4 trillion yuan (US$635 billion) that the central government spent in the past four years to save the country from the global financial crisis in 2008.
"Policy stimulus will pick up, and investment growth may surprise on the upside in the second half," said Zhang Zhiwei, an economist at Nomura.
The National Bureau of Statistics is scheduled to unveil the January-July investment growth figures today, along with some other key economic indicators, including industrial production, retail sales and consumer prices.
Investment expenditure, especially on infrastructure construction, has become an key card that Chinese authorities play to drive the economy, said Lu Zhengwei, chief economist at the Industrial Bank.
Lu said fixed-asset investment will expand 20.4 percent from a year earlier in July, up from June's advance of 20.1 percent.
China has shifted its policy tone from the previous emphasis on domestic consumption as the growth engine to "maintaining reasonable investment" to boost domestic demand, Premier Wen Jiabao said last month during an inspection tour of Jiangsu Province.
Shaanxi Province took the lead by unveiling plans on stabilizing the economy, and has hastened approval for a batch of key projects and the construction of coal transport facilities.
Other cities, including Guangzhou, Ningbo, Nanjing and Changsha, followed suit by announcing various policy stimuli.
During the past two months, local governments have announced investment plans whose value is approaching 4 trillion yuan, reports said.
"These initiatives by local governments reinforce our view that Chinese economic growth in the second half will rebound," Nomura's Zhang said.
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