SCIO briefing on China's economic performance in April 2025

ThePaper.cn:

Given that investment is an important part of expanding domestic demand, and you've just highlighted the sustained growth in fixed-asset investment, I would like to ask: what are the characteristics of fixed-asset investment currently? And how do you assess China's scope and potential for future investment? Thank you.

Fu Linghui:

Thank you for your questions. Investment is an important component of domestic demand. Since the beginning of this year, all regions and departments have thoroughly implemented the decisions and arrangements of the Party Central Committee and the State Council, actively promoted large-scale equipment renewals and the trade-in of consumer goods, and actively expanded effective investment. Overall, the effects of promoting investment continue to emerge, and have the following main characteristics:

First, investment has maintained overall stable growth. As the policies of implementing major national strategies and building up security capacity in key areas, as well as the policies of large-scale equipment upgrades and consumer goods trade-ins, continue to take effect, investment potential is continuously being stimulated, and investment in fixed assets remains stable. From January to April, investment in fixed assets grew by 4%. Driven by large-scale equipment renewal, investment in the purchase of equipment grew by 18.2% from January to April, contributing 64.5% to the growth of total investment.

Second, manufacturing investment grew rapidly. As China's industrial structure optimizes to meet mid-to-high end market demands, traditional industries are being transformed and upgraded, and emerging industries are developing rapidly, driving faster growth in manufacturing investment. In the first four months, investment in manufacturing increased by 8.8% year on year, significantly faster than the overall investment growth. Driven by industrial upgrading and development, investment in consumer goods production and equipment manufacturing showed good growth momentum. From January to April, investment in consumer goods production and equipment manufacturing increased by 13.4% and 8.2%, respectively.

Third, investment in high-tech services showed good growth momentum. The accelerated integration of technological innovation and industrial innovation has expanded demand for high-tech services, driving investment growth in related industries. From January to April, investment in high-tech services grew by 11.3% year on year, with investment in professional technical services and information services growing by 17.6% and 40.6%, respectively.

Fourth, infrastructure investment grew steadily. With the accelerated issuance and use of special local government bonds, the driving effect of government investment continued to emerge, and infrastructure investment maintained steady growth. From January to April, infrastructure investment grew by 5.8% year on year, faster than the growth of total investment. Specifically, investment in water conservancy management grew by 30.7%, and investment in water transportation grew by 26.9%.

Since the beginning of this year, the economy has been generally stable, and the policies that support major national strategies and enhance security capabilities in key areas as well as promote consumer goods trade-ins and large-scale equipment renewals have been paying dividends. Industrial upgrading and development have made positive progress, offering a solid foundation for expansion of effective investment. Looking forward, China's investment potential is still huge, and there are still many favorable factors supporting investment growth. First, there is ample space for industrial upgrading and development. The new generation of information technology industry is booming, and emerging industries represented by high-end equipment and artificial intelligence (AI) are developing well, with increasing investment in innovation. Second, major regional strategies are guiding and driving development. Since the 18th CPC National Congress, the implementation of a series of major regional strategies have been accelerated. The coordinated development of urban and rural areas and new urbanization present huge investment potential. Third, there is still significant demand for investment in social development and livelihood improvement. Investment in livelihood improvement has been increasing, but there is still a gap compared with the needs of the people. At present, China attaches great importance to ensuring and improving people's livelihoods, continuously increasing investment in the social and livelihood fields, which is also conducive to sustained growth of investment.

However, it should also be noted that the internal driving force for investment growth is clearly insufficient. Therefore, it is necessary to implement the spirit of the Central Economic Work Conference and the "two sessions," by focusing on improving investment efficiency and continuously optimizing the investment structure. Increased investment will be leveraged to help expand demand and optimize supplies and thereby boost healthy and sustained economic development. Thank you.