China eases infrastructure funding to boost growth
Beijing has allowed major infrastructure projects to include special bonds issued by provincial governments as part of the project capital, which can then be used to secure bank loans. The change, announced on 10 June, will cover railways, highways and power and gas projects, among others. Retail investors and insurers are being encouraged to buy the special bonds, while banks are being told to invest in infrastructure projects. China's construction sector, including real estate and infrastructure projects, accounts for over 60pc of domestic steel use. Strength in these sectors has kept steel mills profitable since 2016. Beijing has so far allowed provincial governments to issue over 2.15 trillion yuan ($311bn) in special bonds this year to finance infrastructure projects. But infrastructure growth has remained modest by recent standards at 4.4pc in January-April, despite the government saying multiple times that it is accelerating fiscal spending on these projects.
Tags : INTERNATIONAL