Xi turns to construction spending as lockdowns hit China economy
China said it would step up infrastructure construction after a meeting Tuesday chaired by President Xi Jinping, the latest sign of an all-out effort to bolster an economy that’s been hammered by a widening series of Covid-related lockdowns.
The central financial committee decided to enhance and advance projects in some areas, state broadcaster CCTV reported Tuesday. They are to include airports and other transportation hubs as well as energy and water conservancy projects.
The committee also urged increased fiscal spending and a broadening of long-term financing channels for the construction.
Fears about the economic toll of Covid Zero have shaken markets desperate for more policy support: The benchmark CSI 300 stock index closed at its lowest level in two years this week while the yuan has tumbled to its weakest level since November 2020.
Earlier Tuesday, the People’s Bank of China sought to reassure markets with a broad pledge to step up support through targeted financing for small businesses and a quick resolution of an ongoing crackdown on technology firms.
China’s leaders are also under mounting pressure as they gather for a critical meeting of the Communist Party’s Politburo -- its top decision-making body -- in the coming days.
Several prominent policy advisers and Chinese economists have called on the government to take more decisive measures to prop up the economy, ranging from the relaxation of property and internet curbs to acting with more flexibility when it comes to Covid restrictions and lockdowns.