China announced it’s offering RMB 500 billion ($70 billion) worth of capital to spur investment, in a long-anticipated move to boost growth after provinces likely diverted funds from projects as they borrowed more to restructure hidden debt, reports Bloomberg. The government is allocating the money as equity capital under the so-called “new financing policy tool,” said Li Chao, a spokesperson of the National Development and Reform Commission, China’s top economic-planning agency. As part of the program, China’s three policy banks will raise funds through bond issuance or other means and buy stakes in projects, Bloomberg reported earlier this year.
“We will make sure local governments accelerate project construction, generate more tangible output as soon as possible, and expand effective investment to promote stable and healthy economic development,” Li said at a briefing on Monday.
Beefing up funding for projects has become increasingly urgent after fixed-asset investment slowed rapidly in recent months, with its growth in the first eight months hitting the weakest on record for that period outside the pandemic.