Stocks of Chinese construction companies, cement makers, and machinery suppliers soared on Monday after Beijing vowed to step up infrastructure investment in support of the economy.
The CSI Infrastructure & Engineering Index (399995) jumped by 6.2% and the CSI Construction Material Index (931009) rose 4.8% on the the first trading day after the Chinese New Year holiday.
The benchmark CSI 300 Index edged up 1.5% on Monday.
An official from China’s top economic planner, the National Development and Reform Commission (NDRC), said China would “take early actions” this quarter by boosting spending on infrastructure to stabilise economic growth amid challenges.
Eight provinces and municipalities – including Shandong, Beijing, Hebei and Shanghai – have published lists for key infrastructure projects this year, proposing investment totalling 15.6 trillion yuan ($2.453 trillion) on more than 6,500 projects, such as data centres, 5G networks, urbanisation, and elderly care facilities.
The NDRC proposed measures “to moderately move up investment in infrastructure” and to try to “make solid progress in the first quarter”, the state-run Xinhua News Agency reported on Saturday.
Fixed-asset investment will be China’s “wild card” to drive economic growth this year amid weak domestic consumption and slowing export growth, Chris Leung, the chief economist for China and Hong Kong at DBS, said in a webinar last month.
Leung expects China’s fixed-asset investment to grow by 6.5% this year, from 4.9% last year. He estimated that the growth of retail sales would drop to 6% this year, from 12.5% in 2021, and that of exports will decline to 7%, from 29.7% last year.
• Iris Hong
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