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Massive Investment in Infrastructure to Reinforce Economic Growth
China will be able to meet the target of the Ninth Five-Year Plan period (1996-2000) to invest 13 trillion yuan in fixed assets by the end of this year, according to an official from the State Development Planning Commission.
The central government has decided to issue another 50 billion yuan in long-term treasury bonds during the second half of the year, the latest effort to further improve infrastructure.
At the beginning of the five-year period, the government adopted a moderately tight fiscal policy. However, the Asian financial crisis in later years exerted a negative impact on China's economic performance. So, in 1998, China turned to a proactive financial policy, instead.
The most important of the measures the central government took is to issue long-term T-bonds in a move to boost construction of infrastructure and stimulate domestic demand, the official said.
By now, the government has issued 360 billion yuan of T-bonds, leading to a total investment of 1.5 trillion yuan from banks and the society as a whole.
T-bond issuance helped contribute 1.5 percentage points to GDP growth in 1998, about two percentage points in 1999, and will also boost the national economic development this year, according to the official.
More important, the government has done many matters of great significance that it couldn't afford to do for a long time.
Over the past four years, the government injected 722.4 billion yuan into 129 state key projects, involving power, transportation, telecommunications, and petrochemicals.
Investment in the Three Gorges Dam Project, for example, totaled 65.16 billion yuan by June, and at some sections of the dam, cement casting has reached the designed height of 185 meters.
Another example is the 300-billion-yuan west-east natural gas pipeline project, which was started early this year at a time when the central government began to shift its development strategy westward.
Increased input in infrastructure has not only helped maintain synchronous growth of fixed assets investment and overall economic development, but also avoided redundant construction by giving priority to basic and pillar industries.
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