How to Stabilize Investment? Members of the Government Work Report Drafting Team Answer Questions from China Economic Daily: Need to Fully Leverage the Guiding Role of Government Funds and the Leading Role of Major Projects

Everyday Economic News Reporter | Zhou Yifei Everyday Economic News Editor | Huang Sheng

On March 5th, the State Council Information Office held a briefing, where Shen Danyang, head of the drafting team for the “Government Work Report” and director of the State Council Research Office, and Chen Changsheng, member of the drafting team and deputy director of the State Council Research Office, interpreted the “Government Work Report.”

Currently, there is significant downward pressure on investment. Last year’s Central Economic Work Conference explicitly called for “promoting investment stabilization and recovery.” Could you introduce the various measures proposed in this year’s “Government Work Report” to stabilize investment?

In response to this question, Chen Changsheng told the Daily Economic News reporter on-site that the government should fully leverage the guiding role of government funds and the traction of major projects. This year, government investment funds in areas such as central budgetary investments, “dual” construction projects, local government special bonds, and equipment renewal will exceed 5 trillion yuan. When combined with supporting funds from local governments, the scale is substantial, and its driving effect is highly anticipated.

This Year, We Will Implement Actions to Expand and Improve the Service Industry

Chen Changsheng further explained to the Daily Economic News that the decline in fixed asset investment has indeed attracted attention. As one of the key focuses of macroeconomic regulation this year, the Central Economic Work Conference proposed to promote investment stabilization and recovery. From the perspective of national development stages, as the economic structure adjusts and real estate reforms continue, some traditional infrastructure has been largely completed, leading to a slowdown in overall investment. However, it is also important to see that the investment structure is being optimized. While real estate investment may be underperforming, many other areas of investment are still promising, especially emerging industries.

“For example, last year, investment in information services grew by 28.4%, and investment in aerospace equipment manufacturing increased by 16.9%. During this process, we see new investment potentials opening up, such as our national water grid, new power grid, next-generation communication networks, and computing power networks, all of which will drive significant investment. Urban renewal demands are also substantial. Additionally, this year, the implementation of actions to expand and improve the service industry and the growth of emerging industries will also create space for private investment,” Chen Changsheng said.

The briefing scene at the State Council Information Office. Photo source: Daily Economic News reporter Zhou Yifei

Chen Changsheng believes that there are also some new areas worth paying attention to. For example, in recent years, the “Government Work Report” has repeatedly emphasized investment in people and serving people’s livelihoods—investments in human capital, intangible assets such as digital assets and intellectual property rights are also rapidly expanding. Observing many developed countries, the growth potential of these investments is very large.

Strive to Promote Scenario Opening to Activate Investment

How to stabilize investment? Chen Changsheng responded to the Daily Economic News reporter that the approach mainly involves three aspects. The first is to fully leverage the guiding role of government funds and the traction of major projects. This year, investments such as central budgetary funds, “dual” construction projects, local government special bonds, and equipment renewal will total over 5 trillion yuan. When combined with local matching funds, the scale is large, and the driving effect is promising.

Another aspect is the traction of major projects. This year marks the beginning of the “14th Five-Year Plan,” and the “14th Five-Year Plan Outline for National Economic and Social Development of the People’s Republic of China (Draft)” has planned 109 major projects, adhering to the principle that “funds follow projects.” Although some funds face difficulties in finding projects, these projects are already planned and are mature, which will generate significant traction.

The second aspect is to actively promote scenario opening to stimulate investment. Opening scenarios is urgent for enterprises, and the “Government Work Report” has also made arrangements in this regard. Specifically, “In traditional scenarios, improve the long-term mechanism for private enterprises to participate in major project construction, such as railway, water conservancy, and energy projects, with more projects open to them. Some local governments are already implementing this; in their work reports, they have proposed opening nuclear power and offshore wind power projects to private capital, with minimum shareholding ratios. There are also emerging scenarios, such as biomedicine, aerospace, and low-altitude economy, which are important new fields that could grow into pillar industries. For example, the low-altitude economy has developed rapidly in recent years and is already being used effectively in areas like agricultural and forestry pest control and inspection,” Chen Changsheng said.

He believes that the next step should be to accelerate the opening of airspace resources and optimize and simplify low-altitude flight approval procedures, opening up scenarios such as low-altitude logistics and urban governance. Many new scenarios, including service robots, can also create new space for private investment.

The third aspect is to activate and unleash investment potential through deepening reforms. “For example, we need to optimize and relax access to the service industry, clearly stipulating that, apart from environmental protection and health requirements, no other prohibited clauses should be illegally set. Additionally, this year, we will accelerate revisions of the Bidding Law and Government Procurement Law, which will impact private investment and cross-regional investment by small and medium-sized enterprises, opening up investment opportunities and ensuring fair competition. We will also promote price reforms to balance business profits and losses, break hidden barriers, and make the acquisition of factors more equitable. Through these reforms, we aim to stimulate the vitality of private investment. We hope that through these measures, investment will show positive changes this year.”