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China injects $70B to boost infrastructure

Beijing ramps up spending to support growth

Beijing – May 30, 2025 The Chinese government announced a plan to inject 500 billion yuan (about $70 billion) to stimulate investment in infrastructure projects, a move aimed at revitalizing the economy amid signs of a slowdown in the construction sector and private investment. According to reports published by Bloomberg, this financing package will be used to accelerate work on key projects within the "China 2035" plan, such as transportation networks, clean energy technology, and digital infrastructure. The bulk of the funds are expected to be disbursed through local governments and public institutions in the coming months. This move comes after a series of weak economic data, including a decline in real estate investment and a slowdown in consumer demand, which has prompted authorities to redirect spending towards vital sectors.

Market Impact:

The Chinese Yuan: rose slightly against the dollar amid expectations of improved growth.

Asian stocks: saw gains driven by the infrastructure and energy sectors.

Commodities: Demand for industrial metals such as iron ore and copper is expected to increase, which could support their prices in the short term.

Oil: may see a limited rise, supported by expectations of improved industrial activity in China.

Forecast:

Analysts expect this package to lead to a gradual improvement in growth indicators during the second half of the year, especially if it is accompanied by further monetary policy easing.

 - Source: Reuters

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