China has sped up approvals for investment projects by approving over $100 billion worth of infrastructure projects in late October and early November in a bid to stabilize economic growth, Chinese state-run Xinhua News Agency reported on Saturday, citing the state broadcaster.
According to Xinhua, state-run China National Radio announced on Saturday that the nation’s top economic planning agency, the National Development and Reform Commission (NDRC), approved a total of 21 infrastructure projects between October 16 and November 5 with a total investment value of 693.3 billion yuan ($113.24 billion).
The total of 21 approved projects includes 16 railways and five airports, according to the report, with the aim of hedging against falling investment in the nation’s real estate market.
“Particularly speaking, most railway and airport projects are quite necessary in the country and they are also important to the local economies. If these projects are approved this year, they could be launched early next year, and they will help stabilize the economy in the medium and long term,” Lian Ping, Chief Economist with the Bank of Communications, told Xinhua.
On Tuesday, the NDRC drafted a plan to ease limits on foreign investment in some of China’s sectors, Xinhua reported.
The drafted plan will cut the number of sectors which China has placed foreign investment limits to 35 from the current 79, the report said.
The NDRC said that these measures are aimed at adapting to a more globalized economy and will help China speed along its “opening up” process while also improving transparency.
In the third quarter, China’s economic growth decreased to 7.3%, down from 7.5% growth in the second quarter. China’s third quarter economic growth was the slowest rate since the 2008-2009 global financial crisis and threatens the nation from missing its official annual growth target of 7.5% in 2014.
Should China miss its annual growth target of 7.5% in 2014, it will be the first time in 15 years that the nation falls short of reaching its growth target, which will add further concerns to an already unstable global market that China will start to drag on global growth.
Chinese President Xi Jinping, speaking at the Asia-Pacific Economic Cooperation (APEC) CEO Summit in Beijing on Sunday, has signaled that China is ready to accept slower economic growth.
Xi told executives in attendance at the APEC summit that a growth rate of “around 7%” would still make China a “top performer”, according to a report from Bloomberg.
Xi also said that an economic slowdown is now a part of China’s “new normal” as the nation’s economy shift gears to be fueled by more services, consumption, and innovation – versus infrastructure investment, according to the Bloomberg report.
A recent report from The Conference Board, an independent New York-based research association, said that economic growth in China will slow sharply over the approaching decade as productivity plunges and government leaders fail to push through difficult measures to revamp their economy.
The report from the Conference Board said that China’s growth will slow to an average rate of 5.5% between 2015 and 2019 and will fall further to an average rate of 3.9% between 2020 and 2025, compared to economic growth of 7.7% in 2013 and an average annual growth rate of 10.2% for the 30 years through 2011.
Sources: Xinhua, The Conference Board, Bloomberg