The Paper.cn:

What were the changes in the investment data for July? What are the reasons behind these changes? How do you assess the investment outlook in the coming months? Thank you.

Fu Linghui:

Thank you for your questions. From January to July, fixed asset investment increased by 1.6% year on year, showing a slowdown compared to the January to June period. The actual growth rate of fixed asset investment, after deducting price factors, is estimated to be4% to5%. The decline in the nominal growth rate of investment can be attributed to several factors: including short-term influences such as frequent high temperatures and heavy rainfall in some regions, which impact the project construction; the complex and volatile external environment, intensified competition among domestic enterprises, and declining returns on investment; as well as structural reasons related to China's transition process, where the investment momentum in traditional industries is weakening, with emerging sectors that are not currently able to fully compensate for the shortfall. Although the nominal growth rate of investment has slowed, the physical investment remains substantial after deducting price factors. The guidance of innovation-driven development and the policy for large-scale equipment renewal policy, as well as the investment structure continues to be optimized, which in turn creates favorable conditions for economic transformation and upgrading. The key aspects are as follows:

First, investment in manufacturing registered fast growth. Driven by the steady advancement of the efforts to build China into a manufacturer of quality, the upgrading of traditional manufacturing industries and the accelerated development of emerging manufacturing industries have supported the rapid growth in manufacturing investment. From January to July, investment in manufacturing increased by 6.2% year on year, significantly outpacing overall investment growth. Investment in the textile, clothing, and apparel industry increased by 25.2%, investment in the automobile manufacturing industry increased by 21.7%, and investment in the general equipment manufacturing industry increased by 14.8%.

Investment in high-end industries has increased. Scientific and technological innovation is guiding industrial innovation, while the cultivation and growth of new quality productivity driving investment growth in high-end sectors. During the January to July period, investment in the aerospace and equipment manufacturing industry rose by 33.9% year on year, investment in computer and office equipment manufacturing increased by 16%, and investment in information services grew by 32.8%, all maintaining a rapid growth momentum.

Third, investment in key sectors witnessed rapid growth. With continued progress in the implementation of major national strategies and building up of security capacity in key areas, investment in infrastructure in key areas expanded rapidly. Investment in the water conservancy management industry increased by 12.6% from January to July, and investment in information transmission grew by 8.3%. Large-scale equipment renewal has significantly bolstered investment, with investment in purchasing equipment, tools and instruments rising by 15.2% year on year during this period. This category accounted for 16.2% of the total investment, contributing 2.2 percentage points to overall investment growth.

Fourth, investment in the green transformation of energy registered steady growth. As China continues to deepen the green transformation of its energy supply, investment in clean energy-related sectors has been expanding, strongly supporting and ensuring the country's energy security. From January to July, combined investment in solar, wind, nuclear, and hydropower generation increased by 21.9% year on year, maintaining a rapid growth.

Overall, China's investment scale continues to expand, and the investment structure is constantly improving. The pressure facing investment growth is temporary and should be viewed comprehensively. Looking ahead, the country still possesses great potential for investment. There remains significant gap in our per capita capital stock compared with developed countries. Going forward, the accelerated development of new quality productive forces, promoting coordinated development between urban and rural areas and between regions, whilst addressing inadequacies in public well-being all require increased investment. In the next stage, we must adhere to high-quality development, deepen the construction of a unified national market, further improve the investment environment, mobilize investment enthusiasm from all sectors, stimulate vitality of private investment, expand effective investment, promote continuous optimization of the supply structure, and promote the healthy and stable development of the economy. Thank you.