As China’s economy is plagued by sagging demand, the uncertainty of supplies and lower expectations, the government once again has
resorted to massive infrastructure projects to stimulate growth. After only 10 days into 2022, China has already started over 5,000 major infrastructure projects, with a total investment of more than 3 trillion yuan (US$ 0.47 trillion).
At an Economic Work Conference in December 2021, the central government proposed to “deploy infrastructure investments ahead of the time,” implying an increase in infrastructure investments in 2022. At the time, the Ministry of Finance issued an added quota of 1.46 trillion yuan (US$ 0.23 trillion) for the special debts in 2022.
At the beginning of the year, several provinces disclosed plans to issue local government bonds in the first quarter, on the scale of about 800 billion yuan (US$125 billion), including over 550 billion yuan (US$86.3 billion) in new special bonds. Other financing tools are also being promoted, including real estate investment trusts (REITs) in the infrastructure sector, the green government-social capital cooperation (or Public-Private Partnership PPP) projects.
The Securities Times, a mainland based financial news outlet, reported that as of January 10, at least 11 provinces have held project start-up activities, involving more than 5,000 major projects with a total scale of investment of more than 3 trillion yuan (US$0.47 trillion). This compares to the level of 1.2 trillion yuan (US$0.19 trillion) from January of 2021. The key areas of investment include 5G network, industrial Internet, Internet of Things, artificial intelligence, and big data center.
Source: Securities Times, January 11, 2022
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