China to increase infrastructure construction spending

Construction workers stand on scaffolding in front of high voltage power lines in Shanghai. REUTER/Aly Song/File Photo

China will step up infrastructure construction to boost domestic demand and drive economic growth going forward, state TV reported, citing a top economics meeting chaired by President Xi Jinping, according to a report by Reuters.

The world’s second-biggest economy (and world’s biggest market for construction equipment) is at risk of a sharp slowdown as Covid-19 restrictions across a large swathe of the country hit consumer spending, the property market remains mired in a downturn and exports look set to slow further.

Investments would be brought forward for infrastructure projects that are beneficial to industrial growth and to safeguarding national security, according to the meeting, and transportation, energy and water resources would be among the focus.

The government will speed up construction of green and low carbon energy bases, improve the oil and gas pipeline networks, and build a batch of regional and cargo airports, it added.

New types of infrastructure including super computing, cloud computing, artificial intelligence platforms and broadband would be also included in the government’s push, according to the meeting.

Financing needs for these projects will be met and fiscal spending would be stepped up.

Data showed that fixed-asset investment expanded by a better than expected 9.3% in the first quarter from a year earlier, helped by a move to front-load 2022 local government special bonds.

(Reporting by Beijing Newsroom, Editing by Louise Heavens and Chizu Nomiyama)