Swiss Radio:

Looking back to consumption, will there be further measures taken to enhance consumption to turn it around?

Kang Yi: 

Consumption has become a concern for everyone. I have talked about this just now, so I'd like to invite Mr. Fu to give you more information. 

Fu Linghui:

Consumption has been of great concern for everyone. Given the complicated and grim situation, governments and departments at all levels adopted a series of policies to promote consumption last year. In 2023, China released medium- and long-term policies to further expand domestic demand. Then, governments and departments at all levels are expected to play a bigger role in spurring consumption in a bid to expand domestic demand and promote economic recovery. As the pandemic containment has entered a new phase, the entire environment is more favorable for consumption, and people with increased spending power are more willing to spend. Recovery of consumption is expected to see good momentum this year, which will help China's economy to deliver a better performance. Thank you. 

Yicai:

What do you think of fixed asset investment in 2022? The growth rate of investment has been declining despite the country's policies and measures to ensure growth and investment stability. What's behind this decline? What do you think of these investments going forward? Thank you. 

Kang Yi:

Thank you. Fixed asset investment played an important role in stabilizing the economy in 2022, with capital formation accounting for 50.1% of the country's GDP growth. In 2022, fixed asset investment witnessed steady growth, up 0.2 percentage points from the previous year. All regions and all government departments made great efforts to ensure the construction of the key projects. Stepped-up endeavors have been made to shore up weak links and accelerate the issuance and use of local government special bonds. Policy-based and developmental financial instruments have been made good use of. In this way, fixed asset investment has maintained stable growth, with its structure being improved. Investment has played a key role in keeping growth stable and promoting structural adjustment.  

Investment continued to expand, reaching 57.2 trillion yuan. Investment in the manufacturing sector grew rapidly, with a year-on-year growth of 9.1% in 2022, 4 percentage points faster than that of the national investment. The investment in manufacturing technology transformation increased by 8.4%, accounting for 40.6% of the total investment in the manufacturing sector, with its share surpassing more than 40%. Investment in infrastructure continued to accelerate, with investment in infrastructure growing by 9.4% year on year. The share of investment increase in water conservancy management was 13.6%, public facilities management was 10.1%, and information transmission was 9.3%. Investment in high-tech industries also witnessed rapid growth, up 18.9% from the previous year. Such growth is 13.8 percentage points faster than that of the national investment. The growth rate for high-tech manufacturing was 22.2%, and the rate for high-tech services was 12.1%. Moreover, investment in areas that are important to people's lives witnessed rapid increases, up 10.9% year on year, with the investment in health and social work increasing by 26.1%.

Generally, fixed investment remains stable but has new features. Driven by the demand side in the short term but by the supply side in the medium and long term, fixed investment requires the synergy of both supply and demand. This year, fixed investment is expected to continue to expand, considering the following aspects.

First, the investment potential of building a modern socialist country in all respects is huge. As the largest developing country in the world, China still faces a huge gap with developed countries in development levels on a per capita basis. China's per capita GDP is less than one-fifth of that of the U.S. and one-third of that of Japan. China's per capita infrastructure capital stock is only 20% to 30% of that of developed countries, and the space for development is huge.

Second, making up for disadvantages and strengthening weaknesses provides broad investment space. The problem of China's imbalanced and inadequate development is still prominent. The development gaps between urban and rural areas and between regions are relatively big and some rural areas in central and western China are lacking in infrastructure. Shoring up weak links implies broad investment space. Imbalances also exist in urban areas, and many weak points need to be strengthened. 

Third, the momentum of investment in innovative development is strong. In recent years, the high-tech manufacturing industry, represented by electronic medicine and the high-tech service industry, represented by e-commerce, have maintained sound growth. These industries still have great potential in the future. 

Fourth, infrastructure investment has been strengthened. The transformation and upgrading of traditional technological facilities, including transportation, energy, and water conservancy and the accelerated construction of new infrastructure such as 5G, extra-high voltage, intercity freeways and big data centers will drive effective investment. In terms of leading indicators, the total planned investment of projects starting construction in 2022 grew 20.2% year on year, with a growth rate of over 20% for four straight months. In December, the number of newly registered fixed assets investment projects was 38,000, up 7.5% from November. Considering these indicators, investment in 2023 has a solid foundation.

Generally speaking, China's investment has development potential, space and momentum, and is expected to sustain growth. Thank you.