China plans $75bn infrastructure fund to revive economy

BEIJING: China will set up a state infrastructure investment fund worth 500 billion yuan ($74.69 billion) to spur infrastructure spending and revive a flagging economy, two people with knowledge of the matter told Reuters on Tuesday.

China’s economy has started a slow recovery from the supply shocks caused by extensive lockdowns since the second quarter, although headwinds to growth persist, including from a still subdued property market, soft consumer spending and fear of any recurring waves of infections.

The fund is expected to be set up in the third quarter, the sources said without providing further details. The Ministry of Finance and the National Development and Reform Commission did not immediately respond to Reuters’ requests for comment.

China has unveiled a raft of economic support measures in recent weeks, although analysts say the official gross domestic product target of around 5.5% for this year will be hard to achieve without doing away with its strict zero-COVID strategy.

Much of the support for the world’s second-biggest economy has come from fiscal stimulus to counter the impact from COVID-19 this year, with the central bank steadily easing liquidity conditions to lower financing costs.