China is set to speed up spending on roads, railways and utilities to boost economic growth, the , gdpofficial China Securities Journal said on Monday, citing government economists. Zhang Hanya, the head of China’s investment association, a think tank affiliated with China’s economic planning agency, was quoted as saying that boosting investment is the only choice for Beijing to bolster growth since consumption is always stable and exports are meeting overseas demands.
Spending on roads, bridges, subways and airports will boom as investments in industrial facilities will worsen overcapacity and more property investments are discouraged by Beijing, Zhang said.
Fan Jianping, a researcher with the State Information Centre, was quoted as saying infrastructure investment would become the focus for Beijing in the second quarter to keep the economy from cooling too much.
China’s National Development and Reform Commission has speeded up its approval process for local infrastructure projects, the newspaper reported.
The Ministry of Finance has accelerated fiscal spending. In March alone, fiscal expenditures jumped 34.7 percent from a year ago to 1.02 trillion yuan, exceeding the month’s revenues of 905.8 billion yuan.
Zhou Xiaochuan, the People’s Bank of China governor, said in a statement at the weekend China would try to maintain “robust, sustainable and balanced growth”.
The investment association’s Zhang said the central bank has to cut the required reserve ratio by another 5.5 percentage points to keep sufficient liquidity for investment and economic activities.
“A level of 15 percent of (required reserve ratio) will be ideal,” Zhang said. The level is currently at 20.5 percent for major lenders.