China announces huge infrastrucutre spend as it tries to hold its economy in place

China has announced several economic growth measures that include investment in infrastructure and an emphasis on innovation to prevent the economy from falling too quickly this year, Xinhua reported on its website.

According to a government work report delivered by Premier Li Keqiang at the annual parliamentary meetings, China will invest $2.53 billion on new roads and 800 billion yuan on new railways, it said.

Other investment for the year includes 20 water conservation projects and projects ranging from hydropower and nuclear power to urban rail transit and urban underground pipelines.

Though such concentrated investment might give the impression China is returning to the old strategy of investment-led growth, Li gave his reassurance that they are effective investments.

 

China is working to transition to self-sustaining growth, a departure from wasteful investment fed by unbridled credit expansion. A more efficient network of roads and better use of clean energy fit the ambition.

Following 6.9-percent economic growth in 2015, China set this year’s target in the range of 6.5 to 7 percent.

A wave of job losses is on the horizon as China works to slim down its inefficient state-owned enterprises, and this year’s crop of college graduates is estimated at around 7.7 million, so adequate economic expansion and job creation are needed to prevent social instability. The 6.5 to 7 percent growth rate can generate enough new jobs, according to Li.

Aside from these investment plans, Premier Li reiterated that China will continue with supply-side structural reforms and foster new growth engines through innovation and entrepreneurship.

Supply-side reforms seek to advance economic restructuring by reducing ineffective and low-end supply, and boost productivity by expanding medium and high-end supply,

 

Leave a Reply

Your email address will not be published.