China bets $600 billion on infrastructure to revive growth
Skip to main content
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
The Business Standard

Sunday
February 05, 2023

Sign In
Subscribe
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
SUNDAY, FEBRUARY 05, 2023
China bets $600 billion on infrastructure to revive growth

Global Economy

TBS Report
30 April, 2020, 06:55 pm
Last modified: 30 April, 2020, 07:01 pm

Related News

  • US pauses activity at three airports for "national security effort" amid questions about Chinese spy balloon
  • China strongly opposes US move to shoot down unmanned airship
  • US fighter jet shoots down suspected Chinese spy balloon with missile
  • China balloon: Many questions about suspected spy in the sky
  • Senior Chinese official calls for timely communication between China, US to avoid misjudgment

China bets $600 billion on infrastructure to revive growth

Authorities to sell up to 4 trillion yuan of special bonds. Project profitability, sustainability remains in question.

TBS Report
30 April, 2020, 06:55 pm
Last modified: 30 April, 2020, 07:01 pm
Construction of the high-speed railway in Heze, Shandong Province on February 23. Photographer: Li Baozhu/Bloomberg
Construction of the high-speed railway in Heze, Shandong Province on February 23. Photographer: Li Baozhu/Bloomberg

China is trying to build its way out of the coronavirus slump. Economists expect local governments across the country to issue as much as 4 trillion yuan ($565 billion) in so-called special bonds this year, roughly twice last year's total, according to Bloomberg. The proceeds are to be spent on the same type of things that China splurged on following the global financial crisis more than a decade ago -- roads, airports, and railways.

The plan is evident in the city of Heze in Shandong province, a relative backwater that's nevertheless starting work on a connection to its first high-speed railway line.

While work paused for a few weeks amid the shutdowns, residents and officials there report that the framework of a modern bullet-train station is now rising above what were muddy fields just a few months ago.

"Construction has fully restarted and the scene is very lively and bustling these days," said Zhang Fangzhen, a 44-year-old local entrepreneur whose house was torn down to make way for the station.

Work restarted at the construction site on Feb 13, according to the Heze government, when the majority of China was still under lock down.

Fired on by Beijing, Heze and cities like it are pressing on with building projects of uncertain profitability with borrowed cash. The intention is that the bonds become self-financing, with project revenues sufficient to cover principal and interest over the life time of the debt.

"On the surface, debt repayments rely primarily on revenues generated by the projects themselves," said Gloria Lu, senior director for the Asia Pacific Infrastructure Ratings team at S&P Global Ratings. In reality, "these are still government debts," she said.

While governments around the world borrow record sums to fund stimulus aimed at curbing the impact of the coronavirus, China's response has been modest by comparison. That's partly due to officials' painful experience grappling with the debts incurred following massive spending on infrastructure after 2008.

Still, China has already issued 1.29 trillion yuan worth of special bonds this year, with another 1 trillion yuan to be issued by the end of May, easily surpassing the 2.15 trillion yuan total last year. The majority of analysts surveyed by Bloomberg expect the government to sell between 3 trillion yuan and 4 trillion yuan in total.

"Among all the pro-growth measures, infrastructure investment is probably the only thing that the government can take the initiative to beef up and have control over," Lu said.

China is expected to release this year's budget, along with other key targets, at the annual legislative session of the National People's Congress, which is set to kick off on May 22, according to the official Xinhua News Agency. Economists currently see the expansion slowing to below 2% this year.

china / $600 billion / infrastructure / growth

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • GDP growth drops to 7.1% in FY22, per capita income $2,793
    GDP growth drops to 7.1% in FY22, per capita income $2,793
  • Consumers should pay actual costs to get gas, electricity: PM
    Consumers should pay actual costs to get gas, electricity: PM
  • Dr Debapriya Bhattacharya. Illustration: TBS
    Development won't sustain sans political consensus: Debapriya 

MOST VIEWED

  • Jerome Powell, chairman of the US Federal Reserve, speaks during a news conference. Photographer: Al Drago/Bloomberg
    When the Fed's suspected of bluffing, it has a problem
  • Why Pakistan is struggling to get another IMF bailout
    Why Pakistan is struggling to get another IMF bailout
  •  Gautam Adani, center.Photographer: Tomohiro Ohsumi/Bloomberg
    Billionaires from Hong Kong to Arkansas exposed to Adani crash
  • FILE PHOTO: The logo of the Securities and Exchange Board of India (SEBI) is pictured on the premises of its headquarters in Mumbai, India March 1, 2017. REUTERS/Shailesh Andrade/Files
    On Adani row, SEBI says it's committed to ensuring market integrity
  • A broker monitors share prices while trading at a brokerage firm in Mumbai January 15, 2019/ Reuters
    Indian watchdog tells investors markets stable despite Adani rout
  • Demonstrators wait in line after entering the Presidential Secretariat premises, after President Gotabaya Rajapaksa fled, amid the country's economic crisis, in Colombo, Sri Lanka July 10, 2022. File Photo: REUTERS/Dinuka Liyanawatte
    Sri Lanka marks independence anniversary amid economic woes

Related News

  • US pauses activity at three airports for "national security effort" amid questions about Chinese spy balloon
  • China strongly opposes US move to shoot down unmanned airship
  • US fighter jet shoots down suspected Chinese spy balloon with missile
  • China balloon: Many questions about suspected spy in the sky
  • Senior Chinese official calls for timely communication between China, US to avoid misjudgment

Features

Say it with Colours

Say it with Colours

11h | Mode
Photo: Courtesy

From 'Made in Bangladesh' to 'Designed in Bangladesh'

13h | Panorama
Google must adjust to a world where content is increasingly generated by AI. Photo: Bloomberg

Google will join the AI wars, pitting LaMDA against ChatGPT

10h | Panorama
The megaproject Rooppur Nuclear Power Plant has a debt of Tk90,474 crore. Photo: Courtesy

Projects funded with debt need to be selected prudently, and implemented timely

11h | Panorama

More Videos from TBS

ICB to withdraw Padma Bank Investment as return

ICB to withdraw Padma Bank Investment as return

4h | TBS Insight
Kiara Advani & Sidharth Malhotra's Wedding Update

Kiara Advani & Sidharth Malhotra's Wedding Update

4h | TBS Entertainment
What you probably didn't know about CR7

What you probably didn't know about CR7

1h | TBS SPORTS
US shoots down Chinese spy balloon

US shoots down Chinese spy balloon

2h | TBS World

Most Read

1
Leepu realised his love for cars from a young age and for the last 40 years, he has transformed, designed and customised hundreds of cars. Photo: Collected
Panorama

'I am not crazy about cars anymore': Nizamuddin Awlia Leepu

2
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo
Economy

IMF approves $4.7 billion loan for Bangladesh, calls for ambitious reforms

3
Fund cut as Dhaka's fast-track transit projects on slow spending lane
Infrastructure

Fund cut as Dhaka's fast-track transit projects on slow spending lane

4
Photo: Collected
Court

Japanese mother gets guardianship of daughters, free to leave country

5
Belal Ahmed new acting chairman of SIBL
Banking

Belal Ahmed new acting chairman of SIBL

6
Photo: Collected
Startups

ShopUp secures $30m debt financing to boost expansion, supply chain

EMAIL US
[email protected]
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2023
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - [email protected]

For advertisement- [email protected]