Officials in Shanghai, China‘s biggest commercial centre, launched eight infrastructure projects on Tuesday with total investment of 1.8 trillion yuan ($257 billion), state media said.
The move appears to be a bid to recharge the engine of China’s biggest city as Shanghai’s economy slumped 13.7% in the second quarter when Covid-19 outbreaks led to citywide lockdowns in April and May.
The lockdown led to the city suffering the biggest economic contraction among all of China‘s provincial-level regions.
In the first eight months of the year, Shanghai’s infrastructure investment fell 27.4% versus an 8.3% gain nationwide, data from local statistics bureaus showed on Monday.
Shanghai’s infrastructure push echoed national policymakers’ calls to revive sluggish economic growth, which has been hurt not just by Covid outbreaks and lockdowns, but by a protracted property downturn, sluggish domestic consumption, and a fading trade outlook.
To spur growth, authorities have also dusted off an old playbook, issuing debt to fund big public works projects.
The eight projects include a transport hub in eastern Shanghai’s Pudong area, urban railways and housing improvement, as well as offshore wind power demonstration projects and a nature park, according to the Shanghai municipal government’s announcement on Tuesday.
Recent months have seen a pick-up in infrastructure investment in Shanghai, the municipal government said, with contracts signed for 597 big projects from mid-June to mid-September, and investment of 941 billion yuan, while 296 of those have begun construction.
Policymakers have announced more than 50 economy-supporting measures since late May and stressed that this quarter was a critical time for policy action.
The cabinet told local governments to complete selling more than 500 billion yuan in special bonds by the end of October under carryover quotas from 2019.
Such bonds, on top of the annual quota of 3.65 trillion yuan, will help to fund infrastructure projects.
“China’s infrastructure investment will in the coming years bolster its slowing economy,” Moody’s analysts wrote in a recent note.
- Reuters with additional editing by Jim Pollard
NOTE: This report was updated with further details on September 20, 2022.