China orders U$120 billion infrastructure push amid slowing economy as Beijing steps up stimulus

A State Council meeting on Wednesday ordered state-owned policy banks to set up an 800 billion yuan (US$119.6 billion) line of credit for infrastructure projects

Beijing’s calls for faster implementation of growth-boosting policies have intensified with data showing China’s economy continued to decline in May

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Bloomberg Economics estimated China’s infrastructure spending came to 23 trillion yuan in 2021 (US$3.4 trillion). Photo: Xinhua

Published: 12:51pm, 2 Jun 2022Updated: 12:02pm, 10 Jun 2022

Beijing ordered state-owned policy banks to set up an 800 billion yuan (US$119.6 billion) line of credit for infrastructure projects as it leans on construction to stimulate an economy battered by coronavirus lockdowns.

The announcement, made at a State Council meeting chaired by Premier Li Keqiang, could help finance a significant chunk of infrastructure costs this year.

Bloomberg Economics estimated China’s infrastructure spending came to 23 trillion yuan (US$3.4 trillion) in 2021. Large policy lenders include China Development Bank.

Beijing’s calls for faster implementation of growth-boosting policies have intensified since official data showed that economic activity contracted in April and unemployment rose sharply.

High-frequency indicators suggest the decline continued in May, leading Li to warn last week of risks from a possible year-on-year contraction in the second quarter.

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