World Trade

China plans $75 billion in infrastructure to revive the economy, sources claim.

Reuters: China will establish a 500 billion yuan ($74.69 billion) state infrastructure investment fund, two sources told Reuters on Tuesday.

Since the second quarter, China’s economy has started to slowly recover from the supply shocks caused by massive lockdowns. However, there are still problems, such as a weak housing market, low consumer spending, and worries about repeated infection waves.

Sources say the fund will be established in the third quarter.

Analysts say it will be hard for China to reach its official GDP goal of 5.5% for this year without giving up on its strict zero-COVID strategy.

Much of the economic help came from fiscal stimulus to fight COVID-19 this year, with the central bank slowly relaxing liquidity conditions to cut borrowing costs.

To boost the economy, the government is putting more effort into building new infrastructure. They are doing this by giving huge projects 800 billion yuan in new loans and 300 billion yuan in financial bonds.

China will release the 2023 advance quota for local government special bonds in the fourth quarter, with the new quota likely larger than the 1.46 trillion yuan for 2022.

The Finance Ministry and the National Development and Reform Commission did not immediately comment.

The cabinet has directed local governments to issue 3.45 trillion yuan in special bonds for infrastructure by the end of June.

($1 = 6.6939 CNY)

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button