2021 is the first year of China’s 14th Five-Year Plan. In the new stage of economic development, government investment plays a vital role. Experts shed light on how to improve the quality of government investment, seize key investment areas, and improve the investment management system.

During the 14th Five-Year Plan period, domestic and international circumstances will undergo profound and complex changes, said Feng Qiaobin, deputy director of the macroeconomic research department of the Development Research Center of the State Council. The quality and direction of investment should be a focus.

In the fields of fiscal investment and financing, government investment has not received enough attention, and it is necessary to strengthen government investment research, noted Wen Laicheng, executive director of the ZHONGCAI-CSCI Pengyuan Local Finance Investment and Funding Research Institute at the Central University of Finance and Economics. Now that the principal contradiction facing Chinese society has evolved, we must actively promote reform of the government investment management system, investment scale, investment structure, investment performance, investment methods, and legal construction.

According to Ma Haitao, vice president of the Central University of Finance and Economics, realizing theoretical and practical innovation in the field of government investment research can provide a valuable reference for standardizing and facilitating government investment, and advancing research on government investment theory.

Under the current circumstances, fiscal investment and financing have played an important role in the infrastructure field. Yang Ping, head of the research department at the Academy of Macroeconomic Research, said that the key areas of government investment in infrastructure are: New Infrastructure projects, new-type urbanization, and major projects. It is necessary to further improve the management of investment projects, as well as the quality of projects, so that investment can stabilize economic growth.

There is still much room for increased investment demand. Chen Hongwan, director of the finance and credit department at the National Development and Reform Commission, said that it is necessary to focus on weak areas in infrastructure, agriculture and rural areas, and projects concerning people’s livelihoods, and accentuate the key role of investment in optimizing the supply structure. It is also important to accelerate the cultivation of new growth points and expand investment in strategic emerging industries.

Government investment and financing models are in urgent need of innovation, Chen continued. It is imperative to innovate with investment and financing models of public welfare infrastructure and public service projects, and broaden compliant financing channels. It is also necessary to strengthen the system concept, facilitate forward-looking mindsets and systematic planning in the field of government investment and financing.

Wang Chaocai, deputy director of the Research Institute for Fiscal Science at China’s Ministry of Finance, said that in light of the rural vitalization strategy, the introduction of social capital and financial capital in government investment and financing is the key.

Accelerating investment transformation can promote high-quality economic development. Xu Guangjian, a professor from the School of Public Administration and Policy at Renmin University of China, said that government investment should be used to promote the expansion of domestic demand and consumption upgrades, serve people’s livelihoods, and boost industrial transformation and upgrading. In addition, it is necessary to improve the management and supervision system of government investment projects, and improve the accuracy of government investment management with the help of information technology.

Li Hongxia, dean of the School of Public Finance and Taxation at Capital University of Economics and Business, said that the effectiveness of government investment can be evaluated through a combination of market standards and quantitative standards. Moreover, government investment must be based on a macro, long-term and public perspective.

During the 14th Five-Year Plan period, budget reforms will be accompanied by changes in the scale and structure of government investment, and tax reforms will evolve under the influence of government investment preferential policies, said Yang Zhiyong, deputy director of the National Academy of Economic Strategy at the Chinese Academy of Social Sciences.

Reform of the fiscal relationship between central and local governments will propel changes in local government investment, Yang continued. In addition, government investment is accompanied by financial risks. The solution is to accelerate local economic development and strive to provide a stable source of funds for government investment.