China’s fixed investment grew 15.6 percent on average
The
investment in fixed assets in China grew at an average annual rate of 15.6
percent over the past 70 years, according to the National Bureau of Statistics
(NBS) on July 30, in a report regarding achievements in economic and social
development since the People’s Republic of China was founded.
Analysts
say that fixed investment is the basis for development and the high growth rate
shows China’s sound foundation and huge potential for economic growth and
sustainability, as the figure provides important clues as to the economy’s
capacity to produce more goods and services.
China’s
investment in infrastructure and basic industries has kept growing over the
past years. Investment in the transportation industry grew at an average annual
rate of 16.7 percent from 1996 to 2018, according to the report.
“China’s
infrastructure grew out of nothing from 70 years ago, and now leads the world
in infrastructure investment, with the nickname ‘infrastructure maniac,’” Zhao
Xijun, vice director of the School of Finance at Renmin University told the Global Times on July 30.
China
has formed a comprehensive transportation network including railways, roads,
water transport and air transport. In terms of information transmission, the
total length of optical cable lines in China ranked first in the world by the
end of 2018, which shows the outstanding effect of investment in the
information industry, according to the report.
“China
is the world champion in terms of the length of railways and roads, as well as
the number of big bridges and ports,” said Zhao.
Over the
past 70 years, investment has been one of the major drivers of China’s economic
development, with the national capital formation rate (the proportion of total
capital formation in GDP during an accounting period for a country) rising from
38.9 percent in 1978 to 48.5 percent in 2011, the highest since the reform and
opening-up, the report said.
The
capital formation rate was 48.2 percent in 2010 when China became the second
largest economy in the world and outpaced Japan, whose rate was 19.8 percent,
according to data from the World Bank.
In 2018,
China’s capital formation rate stood at 44.9 percent, and total capital
formation contributed 32.4 percent to economic growth, said NBS.
With the
continuous growth of its economic power, China’s industrial structure has begun
to move toward high-end industries, and investment in high-tech industries has
been growing rapidly.
From
2013 to 2018, China’s investment in high-tech industries grew at an annual rate
of 16.9 percent, 6.2 percentage points higher than was seen in the whole
industry. Investment in high-tech manufacturing grew at an average annual rate
of 15 percent, 5.4 percentage points higher than that of all manufacturing
industries. Investment in high-tech services increased by 20.3 percent on
average, 8.2 percentage points higher than the total investment in the service
sector.
“China
has gained lots of experience from infrastructure construction as well as
training talents, which makes a solid foundation for industry upgrade,” said
Zhao.
Some
high-tech industries, including aerospace, satellite navigation, smartphones,
computers and electronic communications, have formed an integrated,
well-equipped and capable industrial ecosystem, moving toward the middle and
high-end of the global industrial chain, the report said.
Meanwhile,
the diversification pattern of Chinese investors has taken shape, increasing
the vitality and driving force of reproduction. Particularly after the reform
and opening-up, with the continuous improvement of the socialist market economy
system, the enthusiasm for investment of various market entities has been
stimulated.
According
to the report, investment in state-owned and collective economies accounted for
28.6 percent in 2018, and investment in the share-holding sector accounted for
30.1 percent. The private sector made up 34.6 percent, and investment from
foreign investors accounted for 4.5 percent.
From
2003 to 2018, non-public sector was gaining rising investment, and China’s
private investment grew at an average annual rate of 22.4 percent and accounted
for 62.6 percent of total investment in 2018, up from 38.1 percent in 2003.
According
to the NBS, China contributed more than 20 percent of the world’s economic
growth annually from 2008 to 2012. In the past five years, China has
contributed more than 30 percent to world economic growth, making it the number
one engine of global growth.
Source:Global
Times
On July 22, 2019, Hengan
(Jiangxi) Household Products Co., Ltd., located in the Economic Development
Zone of Dongxiang District, Fuzhou City, Jiangxi Province, was in a busy scene
in the third phase of the factory, and workers were busy producing. (Photo by He
Jianghua from People’s Daily Online)
China’s fixed investment grew 15.6 percent on average
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