Local governments in China are scrambling to build infrastructure projects after the 2022 Spring Festival holiday, with a focus on transportation and new infrastructure, as the country tries to stabilize economic growth with what experts said is the only effective tool it has, when both consumption and trade growth are facing uncertainties amid the lingering coronavirus crisis. Twelve provinces and municipalities in China announced 16,079 key investment projects for 2022, with a total investment of more than CNY25 trillion. Infrastructure projects account for a large proportion of local governments' investment plans this year, with some regions planning to pour about 80% of their investment into infrastructure projects. In many areas, the proportion has increased from last year. The new rush to beef up infrastructure is evident everywhere.
Transportation projects continue to be a focus of this year's infrastructure investment. Jiangxi province, for example, plans to invest CNY964.5 billion in a total of 641 infrastructure projects this year, including transportation projects like Ruichang airport, as well as reconstructing a section of the Shanghai-Kunming expressway. Guizhou province will kick off more than 400 major infrastructure projects with a total investment of CNY114 billion. An integral part of the money is flowing into transportation, including airport projects in Weining and Panzhou, as well as railway and freeway projects.
Apart from transportation, new infrastructure projects are another highlight in this year's infrastructure investment, with many provinces preparing to deploy more 5G base stations. Guangdong province has announced plans to build new key national laboratories, while speeding up 5G network construction to cover all county regions in eastern, western and northern Guangdong with 5G broadband. A major force behind local governments' strengthened efforts to fuel infrastructure projects is the need to stimulate and stabilize economic growth, at a time when the other two major engines of economic growth – consumption and trade – are facing uncertainties amid the coronavirus crisis, experts said.
“Currently, infrastructure investment is almost the only major method open to local governments to realize more than 5% GDP growth,” Lin Jiang, Professor of Economics at Sun Yat-sen University, told the Global Times. However, experts noted that China's infrastructure investment is facing some challenges, such as a lack of funding and the fact that infrastructure networks in many regions are basically complete.
