Published on Tuesday, July 5, 2022

China | Will infrastructure investment become the key growth stabilizer in 2022?

Chinese authorities reverted to infrastructure investment which used to be the growth engine to stimulate growth amid Zero Covid policy and economic slowdown in 2022.

Key points

  • Key points:
  • Recent “zero Covid” measures and economic slowdown urged China’s policy turnaround from the “new” to “old” growth model which depends on infrastructure, exports and housing to stimulate growth.
  • Infrastructure investment has always been an important counter-cyclical measure for China in the past decades.
  • The authorities promulgated a series of projects in a bid to construct a modern infrastructure system under the 14th Five-Year Plan.
  • The role of New and Old Infrastructure investment must be synergized.
  • We propose three ways to finance 2022 infrastructure projects amid fiscal revenue dips and fiscal expenditure accelerates.

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