Investment, an important engine of the Chinese economy, is expected to grow faster this year, allowing China to better cope with economic uncertainties in 2019, according to industry reports.
A report from the Economic and Strategic Planning Department of the Bank of China (Hong Kong) forecast a rise of 7.3 percent in China's aggregated investment in 2019, up 1.4 percentage points from 2018. Investment's contribution to the growth of China's gross domestic product will rise by 0.5 percentage points to 2.64 percentage points. In other words, about 40 percent of the year's economic growth will be generated by investment. Infrastructure facilities will continue to take a large portion, but the emphasis will be put on improving weak links and consolidating the less-developed areas. Last October, the State Council issued a guideline on beefing up the investment in nine kinds of infrastructure facilities including railways, highways and waterways, airports, water conservancy, energy and environmental protection as well as infrastructure conducive to agriculture and rural development.
Railway and highway construction will be mainly used to facilitate the implementation of significant development strategies, including the Beijing-Tianjin-Hebei coordinated development, the Belt and Road Initiative, the Yangtze River Economic Belt, the Guangdong-Hong Kong-Macao Greater Bay Area and the Xiongan New Area. Rural infrastructure construction will be used to enhance agricultural productivity and boost village development, while urban infrastructure construction will focus on government-subsidized housing, public transit and drainage and waterlogging prevention systems. Citing statistics from the National Development and Reform Commission, the report said in the past month, the economic planner approved infrastructure construction projects with an aggregated investment of 500 billion yuan ($74 billion), which mainly involves inter-city railway, rail transit and airports.
The Ministry of Transport, China Railways Corporation and Civil Aviation Administration of China have all released their infrastructural construction targets for 2019, including fixed-assets investment of 1.8 trillion yuan in highways and waterways, 800 billion yuan in railway investment and another 85 billion yuan in airport construction. Specifically, rural roads of 200,000 km long and waterways of 400 km long will be built, while new rail lines of some 6,800 km long will be laid, up 45 percent from last year.
The report projected that China's infrastructural investment would grow by 8 percent this year compared with 3.8 percent last year. Although China has established brand-new and sprawling highway networks, with high-speed railway mileage taking up more than 60 percent of the world's total, the country's per capita infrastructure facilities remain low, noted the report. Fitch Ratings also predicted faster growth in the year's investment, saying that expanding infrastructural investment was a key part of the efforts to boost steady economic growth.
Analysts with the Bank of China (Hong Kong) called for particular attention to be paid to investment in new types of infrastructure facilities such as artificial intelligence, industrial internet and the Internet of Things. These new types of infrastructure facilities will lay a solid foundation for the transformation and upgrading of the manufacturing industry and inspire manufacturers to make innovations and pursue faster growth. Take the Internet of Things for instance, it will turn automobiles and household appliances into information collecting terminals with artificial intelligence-enhanced functions. In the first three quarters of 2018, smart TVs accounted for 49.5 percent of the country's total TV sales, according to All View Cloud, a data analysis company. Unlike traditional TVs, smart TVs can be controlled by voice and allow man-machine interaction. As for real estate investment, the report projected steady growth in 2019, as the areas of homes for sale fell drastically last year and the real estate control policies in some cities have begun to ease.