Intensifying policy implementation helps stabilize growth and expectation

China issued an additional 1 trillion yuan ($137.49 billion) of government bonds in the fourth quarter of last year to support post-disaster recovery and reconstruction and improve disaster prevention, mitigation and relief capabilities. Latest statistics show that up to now, all the 15,000 projects funded by such bonds have been launched, a sign of China's strengthened macro-regulation to play the role of government investment in boosting the economy.

Restoring and expanding demand is the key to sustained economic recovery while actively expanding effective investment is a key part of expanding domestic demand, in which government investment should play driving effects on social investment. In addition to these additional government bonds, China also plans to issue 1 trillion yuan of ultra-long special government bonds by mid-November. At the same time, the issuance and use of local government special bonds covering more new infrastructure and new industries have also been accelerated.

By making good use of government bonds, special bonds and central budget funds in a coordinated manner, the country has supported the development of key areas and projects, and the investment sector has gained a strong momentum. In the first half of this year, China's infrastructure investment grew by 5.4 percent year-on-year, 1.5 percentage points faster than total investment, driving a total investment growth of 1.2 percentage points. All this shows that government investment has played a significant role in driving the steady growth of investment.

The central authorities have made it clear that the country will implement macroeconomic policies and expand domestic demand. China's economic conditions continue to improve, but it should be noted that investment is still under pressure due to insufficient market demand, and investment momentum needs to be strengthened.

Against this backdrop, the country needs to continuously use macro policies and give full play to the driving role of government investment to further promote stable employment, increase household income and unleash consumption potentials.

The country should intensify policy implementation to better stabilize growth and expectations. It should issue and make good use of ultra-long special government bonds, and strengthen the construction of major projects related to national strategies or in key areas, to stabilize and sustain overall investment. Greater efforts should also be made to push for investment cooperation between government and private capital, and encourage the participation of private enterprises, to stimulate the vitality and consolidate the growth momentum of private investment.

Of course, to promote government investment does not mean projects can be blindly launched. Instead, scientific decision-making and management are needed to ensure economic effects and guard against local government debt risks, and lay a solid foundation for achieving the economic and social development targets for the full year.

ECONOMIC DAILY