China Has Launched A Steady Investment "Combined Boxing" For The New Future.

Because of the continuing downward pressure on the economy, Chinese officials are now launching a new round of "combined boxing" to stimulate investment.

At the beginning of September, Premier Li Keqiang of the State Council convened a standing meeting of the State Council, which decided to reduce the capital ratio of port, coastal, inland river shipping, airport and other fixed assets investment projects.

Li Yang, former vice president of the Chinese Academy of Social Sciences, said in an interview with the media that two key issues need to be solved in order to promote investment. First, the total debt of enterprises is too high. Two, the cost of capital is still high.

To this end, we need to increase the proportion of equity investment through various channels, further promote the reform of local governments and state-owned enterprises, and improve the efficiency of capital utilization.

In view of the fact that the current economic operation is "stable and difficult", the government will introduce more stable investment measures in the future.

Li Huiyong believes that there are still many areas with potential investment potential in China. Besides infrastructure, there are more investment opportunities in the areas of environmental protection and new energy, education and health.

At the end of September, the Ministry of Finance sent two investment packages in two days: first, launched the second batch of 206 government and social capital cooperation (PPP) demonstration projects, with a total investment amounting to nearly 660 billion yuan. The number of projects, the amount of investment and coverage were significantly expanded compared with the first batch. Subsequently, a 180 billion yuan PPP financing support fund was set up to escort PPP smoothly.

The Ministry of finance has also extended the scope of accelerated depreciation of fixed assets to four industries such as automobiles. By easing the way of pre tax burden, the Ministry of finance will allow enterprises to have more cash for investment in the current period.

Official intensive investment in steady investment is due to the downward pressure on the economy in recent months.

As an important indicator of the prosperity of manufacturing industry, the official purchasing index (PMI) of the official and Caixin manufacturing industry in China has both been lower than 50 of the ups and downs in the past few months. The Caixin PMI data even dropped to more than 6 years low, indicating that the manufacturing industry is still shrinking. PMI

According to the statistics of China's National Bureau of statistics, China's fixed asset investment growth slowed down 0.3 percentage points from 1-7 months to 10.9% in the first 8 months of 2015, compared with the same period in 2013.

As of August, the producer price index (PPI) of industrial producers has declined for the 42 consecutive month.

Many institutions therefore lowered China's economic growth rate in 2015, and thought that the target of achieving 7% growth was worrying.

In the latest Asian economic outlook, the Asian Development Bank said that China's GDP growth rate is expected to decline from 7.2% to 6.8% this year due to weaker economic and investment activities and weak exports in the first 8 months.

The Chinese Academy of social sciences has also released a report recently that the decline in investment in enterprises and individuals has led to a slowdown in economic growth.

Taking into account that China's gross domestic product (GDP) grew by 7% in the first half of the year, if the three quarter rose steadily in the two quarter, China's economic growth will be lower in the second half of 2015 and 6.9% in the whole year.

In this case, increase

Stable investment growth is just around the corner.

Li Huiyong, chief macroeconomic analyst at Shenyin Wanguo, pointed out that the current economy

"Almost all come from the attenuation of the pulling effect of investment", so the investment growth strategy is "suit the remedy to the case".

Chief economist of Standard Chartered Bank

It is also considered that the lack of effective ways to stimulate consumption in the short term is the first choice for investment.

He predicts that more measures will be taken by the government to ensure that the target of economic growth in 2015 will be achieved.

It is worth noting that, unlike the previous large-scale investment stimulus policies, the current round of steady investment measures fully embodies the characteristics of orientation and precision. That is to say, in the structure, we have "help and control". We mainly focus on the construction of key areas that are accurate and rewarding, and will not add new excess capacity. We should make up for the short board and eliminate blind investment.

The effectiveness of these policies will gradually emerge.

Ding Shuang expects that the real economy activity is expected to recover in the fourth quarter.

However, some analysts have cautioned that the foundation for the improvement of investment demand is still not solid at present. Many problems such as banks' credit crunch and corporate prudence loans are still restricting investment growth.