Bloomberg:
I have two questions for Mr. Ning Jizhe .First, you mentioned you'd bring forward the announcement of a government bond with a special quota, but even with the increased quota in 2019, the infrastructure spending is still very low. Will the government do anything else to increase infrastructure spending? And also a lot of infrastructure spending from special bonds have been spent on things like land purchasing, which doesn't actually have a large economic multiplier. Do you think the current spending model is efficient? Will you change that so that there's real spending on infrastructure?
And the second question is, you also spoke about increasing consumption to power the economy, but consumption growth isn't as fast as it needs to be to replace the slowing growth in investment. What more do you need to do to encourage consumption to pick up to replace investment as the economy transitions to a consumption model? Thank you.
Ning Jizhe:
As I answered in another reporter's question, I mentioned that investment and consumption must further play an effective role to facilitate the formation of a strong domestic market. We should see that under the influence of a series of policies to promote the formation of a strong domestic market this year, the growth rate of investment has increased compared with the same period last year. In terms of infrastructure investment that you are concerned about, the growth rate from January to August this year picked up compared to the period from January to July. Now we are still taking a series of measures to expand effective investment to accelerate the construction of urban and rural infrastructure. The key is to invest all aspects of funds into appropriate projects and to create a physical workload, and we are now accelerating the pace of our efforts to achieve this.
With regards to consumption, it is both an approach and a goal in economic growth. To improve and guarantee people's livelihoods, it is necessary to promote consumption, as consumption is the number one driving force in economic growth. According to the analysis on the sources of economic growth in the first half of this year, three major demands have jointly stimulated economic growth. In terms of investment demand, consumption demand and external demand, consumption is the biggest driving force. To help the Chinese economy maintain itself within a reasonable range in the first half of this year, consumption can take about 60% of the credit through what it did to prop up the economy. This is 40 percentage points higher than that achieved by investment. So consumption is crucial. To promote overall consumption, we also need to increase the income of residents. This is in addition to what I have just mentioned on focusing to promote the upgrading and expansion of residents' consumption. We have seen that in the first half of this year, the income of residents and overall economic growth have remained basically in sync. The income of residents has actually increased by 6.5%, and GDP has actually increased by 6.3%. In fact, the growth rate of residents' consumption is still faster than the economic growth rate. At the same time, we need to promote rational consumption, create consumption hotspots, while improving the environment for residents' consumption,and we should also adopt policies and measures to encourage and promote residents' consumption, thank you.
