Breaking | China’s best performing mega-city to boost infrastructure spending, despite fears over investment-fuelled growth

Chongqing plans to continue increasing spending on infrastructure, despite fears regarding the sustainability of such investment-fuelled growth.

Zhang Guoqing, the deputy Communist Party chief of Chongqing, told reporters from Hong Kong and Macau that investment in infrastructure would continue.

Chongqing, a mega-city on the upper reaches of the Yangtze River the size of Austria, reported a faster pace of economic growth than most provinces and major cities in the first quarter of the year. According to official figures, its GDP rose by 10.7 per cent compared with the same period last year, with investment in infrastructure, which rose 30 per cent to 73.05 billion yuan (HK$87.3 billion), a big contributor.

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Zhang said the boost in spending was not simply to stimulate the economy, but was to meet “actual demands”, especially in rural and mountainous areas.

Chongqing has set a GDP growth target of about 10 per cent for the year. Zhang said growth in the second quarter was expected to remain above 10 per cent.

Zhang also reiterated government plans to “effectively destock the property market”, saying that the priority was to keep property prices stable.

“[Chongqing] does not want and would never allow any big rise or fall [in property prices],” Zhang said.