Investment push to fuel domestic demand

China's effort to scale up effective investment, with a particular emphasis on encouraging private sector participation, is set to consolidate the recovery of domestic demand, helping stabilize economic growth in the fourth quarter, officials and experts said on Tuesday.

The National Development and Reform Commission, the country's top economic regulator, will ramp up effective investment as part of a broader push to bolster domestic demand, Zuo Gang, deputy director of the NDRC's department of national economy, said at a news conference.

The remarks came a day after China released its economic data for the first three quarters, which showed signs of stabilization in fixed-asset investment, with the year-on-year decline holding at 7.2 percent and a month-on-month rise of 0.07 percent in September ending the monthly downward trend.

Investment has improved at the margin, although it "remains weak overall", said Luo Zhiheng, chief economist and head of the research institute at Yuekai Securities, emphasizing the need to further expand effective investment and revive private investment.

Zuo, the senior NDRC official, said the commission will coordinate work on the 109 major projects outlined in the 15th Five-Year Plan (2026-30) more effectively, alongside the development of the "six networks", covering water, power, computing, next-generation communication, urban pipelines and logistics.

The investment push is backed by substantial financial firepower. Earlier this month, the Ministry of Finance announced the allocation of 250 billion yuan ($37 billion) in unused local government special-purpose bond quotas to expand effective investment in key areas, including the "six networks".

The NDRC has also vowed to make effective use of funds raised through ultra-long-term special treasury bonds and accelerate the disbursement and use of 800 billion yuan under new policy-based financial instruments, Zuo said.

Wang Qing, chief macroeconomic analyst at Orient Golden Credit Rating International, said that stronger policy support will lead to a marked acceleration in the development of the "six networks" and other major projects. "We expect infrastructure investment to return to growth before year-end," Wang said, noting that it dropped 4.2 percent year-on-year in the first three quarters, a decline 0.2 percentage points higher than that recorded in the January-August period.

Guo Liyan, deputy director of the Chinese Academy of Macroeconomic Research's Economic Research Institute, said a broader investment recovery will also hinge on stronger private participation, calling for more high-quality projects to be made available to businesses willing to invest.

In September, the NDRC presented 88 projects to private enterprises in two batches, with planned investment totaling 113.8 billion yuan and a target of attracting 31.1 billion yuan in private capital.

Guo pointed to technological innovation, industrial upgrading and key infrastructure as priorities for effective investment, noting that innovation-driven sectors remain "an important source of support for overall investment".

Li Chao, a spokeswoman for the NDRC, said that to help bring innovations to the market, the commission and other departments have unveiled an initial batch of 136 major projects to test new technologies, products and business models in real-world settings.

Li said that organizers of suitable projects will be encouraged to provide testing opportunities for private firms and small and medium-sized enterprises, while large companies will be supported in working with smaller partners along their supply chains.

Zuo, the senior NDRC official, said that for the remainder of the year, the commission will strengthen coordination between existing and new policies, and introduce additional measures as needed to keep the economy running within an appropriate range.