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China’s fixed asset investment will exceed 45 trillion yuan this year.
Abstract The recent rebound in export growth is closely linked to the country’s “stable export†policy implemented since the first half of 2012. However, there are also external factors, such as Western countries purchasing goods in advance for Christmas and New Year, which contributed to the temporary boost. As these holiday effects faded, China's year-on-year export growth in November 2012 dropped back to 2.9%. This suggests that while short-term measures helped, they were not a long-term solution.
The effectiveness of such policies is difficult to predict and is generally expected to last only until the first half of 2013 at most. Once these supports weaken, the issue of overcapacity will resurface. Currently, overcapacity has spread beyond traditional sectors like steel, aluminum, cement, and automobiles, now affecting industries such as coke, calcium carbide, ferroalloys, copper smelting, textiles, and chemical fibers. Even in emerging sectors like carbon fiber, wind power, polysilicon, lithium batteries, and photovoltaics, overcapacity has become a pressing concern.
This overcapacity has led to intense competition and price wars, causing a sharp decline in corporate profits. From January to August 2012, the profits of large-scale industrial enterprises fell by 12.7% compared to the previous year. Meanwhile, the problem of triangle debt among companies has worsened, with some enterprises facing deteriorating financial conditions.
If the export situation and overcapacity issues worsen again, the government may need to continue its strategy of stable growth in 2013, which could involve boosting investment to drive economic expansion. According to the Chinese Academy of Social Sciences, total fixed asset investment in society reached 37.514 trillion yuan in 2012, up 20.4% from the previous year. In 2013, this figure rose to 44.988 trillion yuan, an increase of 19.9%. While these growth rates appear high, market forecasts suggest they are relatively modest.
According to the China Investment Association, fixed asset investment was expected to grow by 21% in 2012 and 24% in 2013, surpassing 45 trillion yuan in 2013. These figures highlight the ongoing reliance on investment-driven growth, even as structural challenges persist in the economy.