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New move on fixed-asset investment to boost growth: official

Xinhua, September 11, 2015 Adjust font size:

The move to cut the minimum capital requirement ratio for fixed-asset investment aims to boost investment and steady growth amid downward pressure, an official said on Friday.

The State Council made the decision on Sept. 1. It was not related to fixed-asset investment data due on Sunday, but born from recent downward pressure, said Zhang Yong, deputy head of the National Development and Reform Commission.

The cabinet decided to reduce the minimum capital requirement ratio for investment in harbors and airports from 30 percent to 25 percent and from 25 percent to 20 percent for railways, highways and subways. It reduced the ratio from 30 percent to 20 percent for projects involving deep processing of corn.

For industries with overcapacity, China will maintain a relatively high minimum capital requirement ratio of between 30 and 40 percent in order to push forward the country's restructuring efforts, according to the cabinet.

The minimum capital requirement ratio mechanism was launched in 1996 and had been adjusted twice before the latest move. It was raised in 2004 to avoid investment overheating and lowered to boost economic growth in 2009 amid economic downturn, Zhang said. Endi