The National Development and Reform Commission held a press conference last week reiterating that, to ensure the economic growth with an allowable band, the PRC government will uphold the six economic support measures and promptly implement countermeasures in a timely manner to boost consumptions and support investments. Measures include accelerating the launch of investment projects under the central government budget and reducing the capital requirements for infrastructure projects. In addition, The “Regulation on Government Investment” will come into force on July 1, it reinforces the budget management and make sure the funds are in the place. This shows that the PRC government attaches great importance to stimulating the economy with investment growth. In fact, the fixed asset investment growth rate has been accelerating since it bottomed out in August last year. The figure grew at 6.1% for the first four months year-on-year, compared to the whole year growth at 5.9% for last year. Among them, the growth rate of railway transportation investment maintained a high growth of 12.3% for the same period. In addition, the fixed asset investment in real estate advanced 11.9% during the period. Under the downward pressure of economic growth, the PRC government is expected to boost investment projects, supporting the infrastructure sector. The sector is expected to recover and catch up as the current valuation is attractive.
Bloomberg, National Bureau of Statistic, the National Development and Reform Commission