Shanghai unveils $257bn infrastructure investment

21 Sep 2022

Shanghai has announced eight new infrastructure projects are due to get underway, with an investment totalling 1.8 trillion Yuan ($257 billion).

China’s largest city was severely impacted by Covid lockdowns in April and May, and the economy plunged 13.7% in Q2, the worst performance of all 31 of the country’s province-level regions.

During the first eight months of this year, infrastructure investment in Shanghai declined 27.4% compared to a nationwide 8.3% gain, according to data published this week by local statistics bureaus.

Shanghai’s infrastructure drive reiterated calls from national policymakers to revive slow economic growth, which as well as Covid lockdowns, has also been affected by a property downturn and sluggish domestic consumption, Reuters reports.

The eight infrastructure projects that have been announced include a transport hub in the Pudong area in eastern Shanghai, housing improvements, urban railways, a nature park and offshore wind power demonstration projects, as per the announcement by Shanghai’s municipal government.

There has been a rally in infrastructure investment in Shanghai over the past few months, according to the municipal government. Contracts were signed for 597 large projects between June and September, with an investment of 941 billion Yuan, with 296 already under construction.

Since the end of May, policymakers in Shanghai have announced over 50 measures to bolster the economy, and emphasised that this quarter was crucial in terms of policy action.

The cabinet told local governments to finalise selling over 500 billion Yuan in special bonds by the end of next month, within carryover quotas from 2019, the Reuters report adds.

As well as the annual quota of 3.65 trillion Yuan, these bonds will help to finance infrastructure projects.

"China's infrastructure investment will in the coming years bolster its slowing economy," stated Moody's analysts.