China Drives Economy with Infrastructure Investment... Possibility of Large-Scale Flood Control Projects

Shinhwa News Agency, '2022 Economic Outlook' Survey Confirms Expansion of Infrastructure Investment
High-Tech Manufacturing Industry and Entertainment Consumption Industry Targeting Young Generation Also Expected to Thrive

[Asia Economy Beijing=Special Correspondent Jo Young-shin] Infrastructure investment is expected to drive the Chinese economy this year. The prevailing view is that the Chinese government will implement an active macroeconomic policy focusing on infrastructure investment to overcome three major adversities: 'demand contraction,' 'supply shock,' and 'weakened expectations.'

Photo by Xinhua News Agency Capture

State-run Xinhua News Agency reported on the 4th that infrastructure investment will be the driving force behind China's economic growth this year, based on a '2022 Economic Outlook' survey of chief economists from 37 economic institutions within China.

Xinhua News Agency self-assessed that despite global adversities such as the ongoing spread of COVID-19, soaring international raw material prices, and global supply chain disruptions, the Chinese economy achieved 'stable growth' last year and exceeded expectations in the first year of the 14th Five-Year Plan (2021?2025). This is interpreted as having met the Chinese government's economic growth target of 'over 6%.'

Quoting economic experts, Xinhua News Agency diagnosed that infrastructure, manufacturing, and consumption will promote China's economic growth this year. It optimistically forecasted that China's infrastructure investment will recover this year, noting that the Chinese leadership decided at the Central Economic Work Conference held in December last year to actively promote infrastructure investment through proactive fiscal policies.

Wei Yongding, Honorary Professor at the Chinese Academy of Social Sciences and Director of the Shanghai Fushan New Finance Development Foundation, said, "China still has room to further expand macroeconomic policies at this stage," adding, "Infrastructure investment is not only a way to curb the downward trend of China's economic growth but can also lead to about 6% growth."

Ju Houlin, Director of the Securities Research Institute at Galaxy Securities, forecasted, "Expansion of China's infrastructure investment is certain this year," and expected investments not only in traditional areas such as railway and road expansion but also in advanced related fields like data, new energy, and intelligent industries.

Zhong Zhengsheng, Chief Analyst at Ping An Securities, explained, "The government has guaranteed fiscal spending and promised swift execution," stating that this reflects the Chinese leadership's acceptance of market demands for infrastructure investment.

There were also calls for large-scale water control projects. China suffers economic damage every year due to floods in the Yangtze River (Changjiang) region.

Tian Guochang, Director of the Advanced Research Institute at Shanghai University of Finance and Economics, argued, "Some regions in China suffer flood damage every year," emphasizing that this indicates deficiencies in China's social infrastructure and that urgent infrastructure development is needed in those areas.

Chinese economic experts were also optimistic that growth in advanced manufacturing sectors such as bio (pharmaceuticals), aerospace, and computers will continue this year. Xinhua News Agency reported that since the government has ordered strengthening the core competitiveness of manufacturing, investment in advanced manufacturing will continue.

Chen Weidong, Researcher at the Bank of China, expressed confidence, saying, "Although the pandemic impacted China's real economy, it did not stop the rapid growth of China's high-tech industries," and added, "Coupled with the Chinese government's support policies for technological innovation, high-tech manufacturing industries such as aerospace will continue to grow."

Chinese economic experts also gave a positive outlook on China's domestic demand, which is recovering relatively moderately.

Won Bin, Chief Researcher at China Minsheng Bank, emphasized, "By the third quarter of last year, the contribution rate of consumer spending to China's gross domestic product (GDP) reached 64.8%," noting that this is higher than the contribution rates to GDP growth in 2018 and 2019. Although the recovery is slower compared to manufacturing industries, the domestic market remains solid.

This content was produced with the assistance of AI translation services.