Shuli Ren, Columnist

The $505 Billion Puzzle Behind China's Stock Rally

Hopes of big-ticket stimulus have driven infrastructure stocks higher. What actually gets done is a different matter.

March 6, 2020 at 12:44 AM UTC

Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. A former investment banker, she was a markets reporter for Barron’s. She is a CFA charterholder.

Build, baby, build.
Photographer: Billy H.C. Kwok/Bloomberg

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The $8.3 billion bill that Congress has passed to combat the coronavirus may seem like a lot, but to China, it’s pennies. Beijing has spent its way out of distress before, and may just reach for a trillion-dollar fiscal stimulus again.

Investors understandably got excited after media reports that seven out of 31 provincial-level governments have pledged to spend a combined 24.5 trillion yuan — with 3.5 trillion yuan ($505 billion) slated for this year — on infrastructure projects. The final amount will certainly be much higher, as other municipals join the fray.