Construction work resumes at the Changyichang high-speed rail project in Changsha City in Hunan Province on February 12. Photo: Xinhua

With the gradual improvement in the Covid-19 situation in China, the resumption of business is accelerating. Many provinces, cities and autonomous regions have recently issued plans to invest in key projects for 2020.

As of March 1, 13 major cities and provinces, including Beijing, Shanghai and Fujian province, released investment plans and “major infrastructure” projects for 2020, according to data compiled by the 21st Century Business Herald.

Eight cities and provinces announced their investment budgets, which in total amounts to 33.83 trillion yuan (US$4.8 trillion).

Another eight provinces said they would invest up to 2.79 trillion yuan in total, although they have yet to announce their plans. 

China plans to make good use of these investments, kick-off more new investment projects and speed up construction on existing projects, the Political Bureau of the Communist Party of China Central Committee said after a meeting on February 21.

“How to offset the epidemic’s negative impact on the economy? The simplest and most effective way is to develop infrastructure,” Ren Zeping, chief economist of Evergrande Research Institute, said in a recent article. Ren’s research team said it was time to launch a new round of infrastructure investments.

Looking back to the Asian financial crisis in 1998, China issued additional special treasury bonds to invest in new infrastructure projects. During the global financial crisis in 2008, it also launched large-scale economic investments despite a lot of controversy and criticism at that time. These measures were extraordinarily important.

“Over the past 40 years, how could ‘Made in China’ have achieved such a strong competitiveness without its infrastructure projects being built in advance?” Ren Zeping asked.

The coming wave of infrastructure has been reflected in the recent performance of A-shares. On  March 3, the first trading day of this month, companies in the major infrastructure sector surged to touch their daily upper limit. 

Among the 28 Shenyin Wangou grade-one company indices, the building and interior design material sectors increased by more than 8%. Shares of China Railway Construction and China Railway Group rose by their 10% limit, while China State Construction Engineering Corp grew 8.57%.

On March 4, the infrastructure engineering sector, which represents the traditional infrastructure industry, had risen 21.10% from the recent lowest level on February 3, according to the data compiled by Sina Finance.

While the Shanghai Composite Index was floating at about 3,000 points with technology stocks such as chip and semiconductor makers facing downward pressure, infrastructure companies that carry the concepts of 5G and cloud computing technologies had outperformed the market and increased 23.25% during the month ended March 4.

“After the epidemic in 2020 is gone, there will certainly be a new round of infrastructure investment in China, but the focus will shift from traditional infrastructure to a new generation of digital infrastructure,” Zhang Yong, the chairman and chief executive of Alibaba Group, said at a conference on promoting economic development amid the epidemic in Hangzhou on March 2. 

After the Covid-19 epidemic, the infrastructure investment that drives economic growth will not only be traditional materials such as cement and steel, but also “new infrastructure” elements such as 5G, artificial intelligence and the Internet of Things.

Ren said a new mindset should be adopted with the coming infrastructure projects. He said it is important to reform and innovate, rather than simply returning to the old paths, which resulted in a waste of resources and the phenomenon of having built some “ghost towns,” or under-occupied real estate.

In an article published on March 3, analysts at CITIC Securities predicted that the infrastructure investments in China for 2020 will grow by 9-10%, given that the central government had repeatedly mentioned infrastructure investments.

Although the epidemic and tax and fee reduction policies will exert pressure on finance, on the one hand, the deficit ratio can be increased to 3%, on the other hand, the land sales revenue of government funds can also make up for the gap in infrastructure funds.

The size of Chinese special bonds would increase to 3.2 trillion yuan in 2020 from 2.6 trillion yuan last year, CITIC Securities said. Infrastructure would represent 45% of the special bonds issued this year, it said.

The story was written by Huang Wanyi and first published at It was translated by Xu Yuenai.