Investment in new growth drivers strengthens China's domestic demand

China's expanding investment in technological upgrading and strategic emerging industries is playing a vital role in bolstering domestic demand, while faster policy implementation and greater private-sector participation will be crucial to stabilizing investment in the fourth quarter, a senior economic researcher said on Monday.

Guo Liyan, deputy director of the Chinese Academy of Macroeconomic Research's Economic Research Institute, said capital was increasingly flowing into advanced technologies, new infrastructure and modern services that integrate with manufacturing.

"Investment in new growth drivers has become an important force in stabilizing investment and expanding domestic demand," Guo told an economic forum hosted by China News Service.

Her comments came as the National Bureau of Statistics reported that China's economy grew 4.6 percent year-on-year in the first three quarters. Growth accelerated to 4.5 percent year-on-year in the third quarter from 4.3 percent in the second.

The investment figures highlighted a notable shift toward innovation. While fixed-asset investment, excluding rural households, fell 7.2 percent year-on-year in the first nine months, investment in high-tech industries rose 4.9 percent. Investment in intellectual property products, which include research and development and software, increased 9.3 percent, according to the NBS.

Guo said the growing share of investment in intangible assets reflected stronger innovation capabilities, while equipment upgrading was helping traditional industries modernize and emerging industries expand capacity.

Research by her institute indicated that businesses were becoming more willing to invest in digital upgrades, equipment replacement and greener operations, she said. Artificial intelligence, integrated circuits, new energy and commercial space activities continued to attract investment.

Infrastructure projects were providing further support, including computing networks, next-generation communications networks and upgrades to urban underground pipelines, Guo said.

Looking ahead, she said existing and new policy measures would work together to support investment, with new policy-based financing instruments providing capital for major projects and helping attract bank lending and other funding.

Authorities should make better use of the fourth-quarter construction window by accelerating funding disbursement and coordinating policy implementation to turn financial support into progress on projects, she said.

"The key to stabilizing investment is to further stimulate private investment," Guo said.

Private companies were seeking opportunities both in emerging industries with greater technological requirements and in upgrading traditional sectors such as textiles, she said.

She called for more quality projects to be opened to private investors, better project financing arrangements and the removal of barriers to market entry and business operations. Regions with suitable conditions should explore ways for private companies to participate in major projects.

Guo also urged stronger links between investment and consumption, with more funding directed toward public services, consumer infrastructure and new settings for spending.

Investment in tourism, wellness, sports, live performances and digital consumption could address gaps in services while opening up opportunities for businesses, she said.

Such spending could create jobs and raise incomes, strengthening households' purchasing power. Stronger consumption would, in turn, support production and encourage further investment, she added.