BEIJING : China is counting on revived infrastructure spending to support its slowing economy, but controls over local government debt risks and falling investment returns could hamper the renewed push, policy insiders and economists said.
"We need to step up infrastructure investment and stabilize the property sector," Yao Jingyuan, an adviser to the cabinet, told Reuters."The downward pressure on the economy is big this year and the employment pressure is big." In 2008-2009, a 4 trillion yuan spending package largely shielded China's economy from the global financial crisis but saddled local governments and state firms with mountains of debt.LOOKING TO NEW AREAS
The finance ministry has already issued 1.46 trillion yuan in its 2022 advance quota for local government special bonds, on top of 1.2 trillion yuan in unspent bond funds from the fourth quarter of 2021 - part of the 2021 quota of 3.65 trillion yuan.