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Measures ensure economic vitality

Updated: Oct 9,2015 4:03 PM

Premier Li Keqiang meets with workers as he visits a mining equipment manufacturer in Luoyang, Henan province, on Sept 23. The Premier called for workers not just to rely on their expertise but also on technology. [Photo/Xinhua]

The government has implemented various measures to ensure the economy is running on the right track as downward pressure mounts.

It is working to make sure that investment continues to act as a ballast of the economy by rapidly channeling money into infrastructure projects and speeding up approval of such projects.

In the first half of this year, the government finished distributing the 477.6 billion yuan ($75.27 billion) fund set aside for investment projects, mostly infrastructure such as highways and subways.

According to statistics provided by the National Development and Reform Commission (NDRC), the value of major infrastructure projects approved this year, up to Sept 27, amounted to 1.23 trillion yuan.

Also, the commission released 1.97 trillion yuan public-private partnership projects, and invested 4.63 billion yuan into projects to clean rivers and lakes and 50 million yuan into revitalizing Northeast China.

Exports went down by 6.1 percent in August and imports fell 14.3 percent compared to the same month last year. The producer price index in August went down by 5.9 percent compared to the same month last year. The figures mean the need for continuous efforts, including expanding investment, in order to make sure the country meets the target of 7 percent growth.

“Investment makes an indelible contribution to economic growth. But we never allow purposeless investment,” said Zhang Yong, vice-chairman of the NDRC.

Another driver of the economy that the government is building on is deepening reform.

The government has canceled or delegated to lower levels of authorities 586 items of administrative approval. The NDRC has reduced the categories of investment projects that need central government approval by 76 percent. The categories of projects prohibited to foreign investors have been reduced to 38 from 79.

Reforms of the financial sector, the fiscal system and State-owned enterprises are also underway and these will let the market further play its role of determining the distribution of resources.

The country is also boosting regional development through projects such as the Belt and Road Initiative, the Beijing-Tianjin-Hebei collaborative development plan and Yangtze River economic belt strategy.

“Reform has brought, and will continue to bring, the largest benefit for China’s development,” said Guo Chunli, a researcher with an institute under the NDRC.

Besides investment and reform, the government has been emphasizing on the role of innovation in growth.

The State Council released a document of policies to encourage mass entrepreneurship and innovation in June. In the first seven months of this year, the government authorized 56.7 percent more patents than the same period last year.

In the first eight months of the year, more than 11,000 enterprises, on average, were registered every day. In the first half of the year, 1.61 million, or 80.3 percent, of the newly registered enterprises focus on the service sector. Traditional companies that are less competitive are exiting the market, while high-tech industries such as new energy cars, robots and smart televisions are growing rapidly.

The economy will respond gradually to policies such as expanding major infrastructure projects, lowering bank interest rates and reserves, and cutting taxes, and will meet the target of a growth rate of about 7 percent, said Niu Li, a researcher with the macroeconomic lab under the State Information Center, an NDRC think tank.