Beijing ordered state-owned policy banks to set up an RMB 800 billion ($120 billion) line of credit for infrastructure projects as it leans on construction to stimulate an economy battered by coronavirus lockdowns, reports Bloomberg.
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 RMB 23 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.