Investment push will help offset pressure

China will take solid steps to expand effective investment in order to boost demand and foster high-quality development amid downward pressure from resurgent domestic COVID-19 cases, the country's top economic regulator said on Friday.

Experts said China's intensified efforts to expand effective investment will help stabilize the overall economy amid headwinds from home and abroad. They also said they are expecting more growth-boosters such as increasing infrastructure investment, further tax reductions and increasing support for hard-hit enterprises and sectors.

Ou Hong, director of the Department of Fixed Asset Investment at the National Development and Reform Commission, said a big push will be made to bolster investment in infrastructure construction, manufacturing and high-tech industries and shore up weak links in areas that are important to people's lives.

He told a news conference in Beijing that the NDRC will promote infrastructure construction in fields like water conservancy, transportation and energy, accelerate the push for "new infrastructure" construction, spur investment in equipment manufacturing and boost the development of sectors like health, education, eldercare and nursery.

Despite facing pressures from resurgent domestic COVID-19 cases, Ou said China has favorable conditions to stabilize investment. He cited China's plan to issue 3.65 trillion yuan ($572 billion) worth of special-purpose bonds for local governments in 2022 and the 1.2 trillion yuan worth of special local government bonds issued in the fourth quarter of last year, saying they provide strong support for the growth of investment this year.

"(China) still has plenty of scope for expanding investment in various fields like infrastructure construction, strengthening weak links, pushing forward with carbon peaking and neutrality projects, emerging sectors and new urbanization," Ou said.

According to the NDRC, it has so far approved 32 fixed-asset investment projects worth 520 billion yuan, mainly in fields like transportation, water conservancy, energy and high-tech sectors.

Ou said a further boost to private-sector investment would be in order and urged steps to optimize the business climate, encourage the private sector's participation in 102 key projects mapped out in the 14th Five-Year Plan (2021-25).

Given multiple pressures from a complicated external environment and the resurgence of COVID-19 cases at home, expanding investment in fields like infrastructure construction will play a key role in stabilizing the overall economy, said Luo Zhiheng, chief economist at Yuekai Securities.

Luo said he expects more monetary and fiscal stimulus measures from policymakers to boost investment in infrastructure construction and manufacturing as well as credit growth.

Looking ahead, Tommy Wu, lead economist at Oxford Economics, a think tank, said the policy easing outlined in the Government Work Report will boost growth from the second quarter onward.