China Plans 400 Billion Yuan in Special Building ProjectsBloomberg News
Top planning body backs infrastructure projects to spur growth
NDRC to allot more resources in coming quarters, people say
China’s chief planning agency is making more money available to local governments this year under a special bond program to fund infrastructure, according to people familiar with the matter.
The National Development and Reform Commission plans to offer 400 billion yuan ($61 billion) this quarter so local authorities can finance infrastructure and help spur investment growth, said the people, who asked not to be identified because the plans aren’t public. More resources will be allotted in subsequent quarters this year, and the total will be determined by economic conditions, they said.
The NDRC unveiled the special bond program last year as part of efforts to boost spending and hit a 7 percent growth target. The economy is expected to slow further in 2016, and policy makers confront other warning signs, including flagging exports and a deterioration in manufacturing, as they head into their main annual planning meeting next month.
“Infrastructure spending should be the key growth buffer so I would not be surprised to see more like this also for things like highways, railways, pipelines,” said Larry Hu, head of China economics at Macquarie Securities Ltd. in Hong Kong. “To achieve growth of 6.5 to 7 percent, investment has to grow 15 percent at least.”
Making 400 billion yuan available in each of the next three quarters would mark a doubling in the pace of funding under the bond program. Economic planners offered 800 billion yuan in bonds last year.
The NDRC didn’t immediately respond to a faxed request for comment.
— With assistance by Kevin Hamlin, and Steven Yang