Investment still top priority for local govts

Source:Global Times Published: 2013-7-3 23:28:01

Investment is still the top priority for many Chinese local governments in pursuing their economic strategy, the Shanghai-based National Business Daily (NBD) reported Wednesday.

Local economies have performed quite well in their goals so far this year, which is largely due to significant investment, the report said.

For instance, South China's Hainan Province realized fixed-assets investment of 90.97 billion yuan ($14.83 billion) in the first five months of 2013, up 25.2 percent year-on-year.

Local economic growth will still depend on investment, as exports and consumption remain uncertain, the newspaper said, citing an unnamed official from a provincial development and reform commission in Central China.

Infrastructure investment, especially transportation investment, was the most notable among projects being pushed by local governments.

In Central China's Hunan Province, a total of 103.98 billion yuan was invested in infrastructure in the first five months of this year, an increase of 28.1 percent year-on-year.

Hainan Province reported a surge in transportation investment of 86 percent during January to May compared with last year.

The report cited a local government insider who said that infrastructure investment has not been seriously affected despite the country's economic slowdown and weak manufacturing investment environment.

However, some have expressed concerns about blind investment, with such large amounts of capital still being poured into local projects despite the current tight liquidity conditions, the report said.

Lu Ming, a professor with the school of economics at Fudan University, was quoted by the NBD as saying that local governments are always eager to promote investment, whether the macroeconomic situation is loose or tight.

Media reports have said that the fiscal revenues of some local governments were lower than expected in the first five months of 2013 due to the country's economic slowdown.

Posted in: Economy

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