China's infrastructure investment accelerates amid policy support

BEIJING -- In the face of mounting uncertainties in the international landscape and domestic COVID-19 resurgences, China has positioned infrastructure investment as a policy priority to revive the economy while securing sustainable growth.

Official data showed that the country's investment in the infrastructure sector gained 6.7 percent year-on-year during the first five months of this year.

Total planned investment in newly started projects during the period increased by 23.3 percent year-on-year, the National Bureau of Statistics said in a statement.

On top of the positive economic outlook, China has undertaken a flurry of pro-investment initiatives. The country has promised a moderately proactive approach to advance infrastructure investment in last year's Central Economic Work Conference as well as this year's government work report, aligning with the major strategic deployment and the 14th Five-Year Plan.

The country's renewed calls for infrastructure investment were reiterated at a recent State Council executive meeting, which decided to raise up to 300 billion yuan (about $44.71 billion) through financial bond issuance for the capital replenishment of major projects, among other measures.

By the end of May, a total of 2.03 trillion yuan of special bonds have been issued, accounting for 59 percent of the total quota, up 1.4 trillion yuan from the same period last year.

During the period, the country initiated 10,644 new water conservancy projects, including 609 projects each with an investment of more than 100 million yuan, according to the Ministry of Water Resources.

Rather than using the raised funds in an undifferentiated manner, China has made improving the people's wellbeing an investment priority, listing the renovation of old urban communities, the building of underground utility tunnels, and other tasks as the investment focus for 2022.

During the January-May period, investment in healthcare and education sectors expanded by 27.8 percent and 9 percent, respectively.

Besides traditional infrastructure projects, such as roads and railways, the country is also betting on the new infrastructure as a part of its long-term goal to optimize the overall economic layout and foster new growth drivers.

From cloud computing and artificial intelligence platforms to data centers and the industrial internet, China has channeled more investment to advance the development of new infrastructure.

In terms of digital information infrastructure, the number of 5G base stations in the country increased by 275,000 during the first five months of the year, bringing the total to over 1.7 million.

According to estimates by Industrial Securities, the increase in new infrastructure investment in China this year is expected to reach 180 billion yuan.

Among the investment projects is an integrated national big-data system. This mega project launched in February involves establishing eight national computing hubs in the country, plus 10 national data center clusters.

The investment in new infrastructure has expanded steadily and shown strong resilience, with its role in supporting production resumption and stabilizing industrial and supply chain becoming more evident, said Meng Wei, spokesperson for the National Development and Reform Commission, at a press conference.

During the second half of the year, local governments and key enterprises will continue to increase spending on new infrastructure projects and a batch of major projects will kick off, Meng added.