Case 1 – China Investment Demand
China seeking private investment in major projects -Xinhua
China cuts key rates as weak batch of July data darkens economic
outlook
China is seeking private investment in 4,894 major projects with total
investment of 5.27 trillion yuan ($717.69 billion), Xinhua news agency
said, citing the top state planner. The projects mainly involve urban
construction, highways, ports, agriculture and tourism, the agency
quoted the National Development and Reform Commission as saying.
China has in recent weeks unveiled a series of policy measures to aid
private businesses after the sector has been bruised by COVID-19
curbs and a wide-ranging regulatory crackdown that targeted industries
from technology to property. Fixed-asset investment by private
companies shrank 0.5 per cent in the first seven months of the year,
bigger than the 0.2 per cent decline for the first half. Investment in the
property sector tumbled 8.5 per cent year-on-year in January to July,
after shrinking 7.9 per cent in January-June, extending its fall for the
17th consecutive month.
Source: Adapted and edited from CNA, 15 Aug, 2023, 9 Sep 2023
i. Explain any ONE (1) determinant resulting in the decrease in
investment demand by private companies in China. (5 marks)
ii. Discuss any TWO (2) ways for China government to incentivise
private companies to increase investment demand going forward.