Tugboats maneuver a prefabricated part of the Xiamen-Kinmen bridge (Xiamen section) off a shipyard in Quanzhou, East China's Fujian Province on July 4, 2024. The component, which weighs 14,000 tons, will form a key undersea part of the bridge. Photo: cnsphoto

China made significant strides in expanding investment in major infrastructure projects such as transportation networks and water conservancy in the first half of the year, a move that has injected fresh momentum into the economy, experts noted on Wednesday. 

The economy demonstrated resilience with 5 percent growth in the first half year, largely bolstered by the expansion of infrastructure development, experts said. To sustain this growth for the rest of the year will require additional investment, particularly in areas directly addressing public demand.

"Major project construction involves a wide array of enterprises across various sectors, from raw material supply to equipment production and installation… With the government's substantial investment in these fixed assets, economic growth will be further boosted," Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, told the Global Times on Wednesday. Such investments raise living standards and provide momentum for the entire upstream and downstream industry chains.

"The smooth development and operation of major projects will strengthen market confidence, encouraging greater participation by social capital," Wang said.

Since the beginning of the year, various regions have actively promoted the construction of major projects, significantly driving investment.

Data released by the National Bureau of Statistics (NBS) on Monday showed that first-half fixed-asset investment rose 3.9 percent year-on-year to 24.53 trillion yuan ($3.38 trillion).

Major projects greatly contributed to this growth. For example, investments in projects with planned total expenditures of more than 100 million yuan rose 8.4 percent, outpacing overall investment growth by 4.5 percentage points and boosting total investment growth by the same margin.

In the first half of the year, investment in railway construction reached 337.3 billion yuan, up 10.6 percent year-on-year, a record high for the same period in history, China Railway said on Tuesday.

NBS' figures also showed that infrastructure investment rose 5.4 percent. Investment in water conservancy management, aviation and railways - the three major areas of infrastructure investment - all grew by double digits, effectively supporting economic growth, according to the NBS.

Moreover, the government also issued special bonds to provide strong and consistent financial support for infrastructure development.

A NBS spokesperson said on Monday that relevant departments have coordinated the use of ultra-long-term special treasury bonds, local government special bonds and central budget funds, providing necessary financial support for major projects and industry sectors.

With the increased financial support, including the accelerated issuance of government bonds, infrastructure investments are expected to accelerate in the second half of the year, Wang said. Wang said that this will enhance its role as a stabilizer for macroeconomic operations.

Meanwhile, the economic situation remains complicated, with multiple factors such as weak demand and external challenges lingering, as exemplified by the mere 4.7 percent GDP growth in the second quarter, Li Chang'an, a professor at the Academy of China Open Economy Studies at the University of International Business and Economics, told the Global Times on Wednesday. 

For the government to secure the full-year GDP growth target, expanding investment is essential, particularly in major infrastructure projects.

"Infrastructure investment expansion, as a type of economic stimulus, will play a very important role in stabilizing growth and expanding domestic demand in the second half of the year," Li said, noting that major projects such as railways and roads will remain in focus.

Moreover, industrial layouts regarding value-added products such as electric vehicles that represent the country's new quality productive forces will be another area to draw more investments in the second half of the year, Li said.