Projects gather steam in big push

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China's push to implement major projects has accelerated recently, signaling the country's key step to foster sustained steady growth and expand effective investment amid downward pressure, said experts.

Experts projected more steps from policymakers to support the economy in response to mounting uncertainties both at home and abroad, such as stabilizing investment, speeding up the issuance and use of local government bonds and accelerating project approvals, to help alleviate downward pressures on growth next year.

This year, various areas have been speeding up construction of major projects, especially in advanced manufacturing fields like next-generation information technologies, new energy and high-end equipment.

Last month, Central China's Hubei province launched 805 projects involving a total investment of over 452 billion yuan ($71 billion), among which 469 are advanced manufacturing projects.

Shenzhen in Guangdong province is also actively expanding effective investment. The city launched 224 projects with a total investment of 445.53 billion yuan last month, covering a wide range of fields like numerical controls and semiconductor displays.

During the first 10 months of this year, China's fixed asset investment in high-tech industries grew by 17.3 percent year-on-year, 11.2 percentage points above the overall level. And investment in the high-tech manufacturing sector jumped 23.5 percent during the same period, according to the National Bureau of Statistics.

"Accelerated push for the implementation of major projects will help stabilize growth and promote investment," said Luo Zhiheng, deputy director and chief macroeconomic analyst at the research department of Yuekai Securities. "Infrastructure investment and manufacturing investment will play a key role in stabilizing the investment."

Luo said investment in manufacturing will continue to rise amid improved profitability and government incentives to reduce carbon emissions and strengthen industrial chains.

According to him, policymakers will make efforts to ensure the policies are effective and forward-looking in response to risks and uncertainties. "Stabilizing investment will become a key focus. It will help alleviate downward pressures amid potential sluggish export performance, give full play to investment's role in optimizing supply structure and inject strong impetus to the sustained economic development."

Luo estimated the GDP growth rate will reach around 5.2 percent in 2022, saying more efforts should be made to expand effective investment, including speeding up the implementation of projects under the central budget investment plan, encouraging investment in strategic emerging industries, lessening pressures of the rising commodity prices and increasing financing support for small and medium-sized enterprises.

Luo's views were echoed by Wu Chaoming, chief economist at Chasing Securities, who said the manufacturing investment has been gradually playing a key role in stabilizing investment.

Wu said he expects the manufacturing investment will continue to recover in 2022 while the infrastructure investment may rebound within a limited range.

Looking into the next year, Wu said SMEs will face problems and difficulties such as rising raw material prices, power shortages, rising labor costs, insufficient orders and the ongoing COVID-19 pandemic.

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