Case 1 – China Investment Demand
China seeking private investment in major projects -Xinhua
China cuts key rates as weak batch of July data darkens economic outlook
China is seeking private investment in 4,894 major projects with total investment of 5.27 trillion yuan ($717.69 billion), Xinhua news agency said, citing the top state planner. The projects mainly involve urban construction, highways, ports, agriculture and tourism, the agency quoted the National Development and Reform Commission as saying.
China has in recent weeks unveiled a series of policy measures to aid private businesses after the sector has been bruised by COVID-19 curbs and a wide-ranging regulatory crackdown that targeted industries from technology to property. Fixed-asset investment by private companies shrank 0.5 per cent in the first seven months of the year, bigger than the 0.2 per cent decline for the first half. Investment in the property sector tumbled 8.5 per cent year-on-year in January to July, after shrinking 7.9 per cent in January-June, extending its fall for the 17th consecutive month.
Source: Adapted and edited from CNA, 15 Aug, 2023, 9 Sep 2023
Explain any ONE (1) determinant resulting in the decrease in investment demand by private companies in China. (
Discuss any TWO (2) ways for China government to incentivise private companies to increase investment demand going forward.
