China has launched a $120 billion credit line for infrastructure projects, state media has reported, as Beijing tries to jump-start its economy, which has been impacted by the country's zero-Covid measures.
A State Council meeting chaired by Premier Li Keqiang on Wednesday approved the mammoth new sum.
"It is necessary to increase the credit line of policy banks by 800 billion yuan ($120 billion)," state broadcaster CCTV reported.
Experts say the announcement is likely to help provincial governments match Beijing's banner statements on supporting growth.
"It will provide long-term support to various infrastructure projects," Betty Wang and Zhaopeng Xing of ANZ Research said in a report on Thursday.
In turn, that will "drive business activities along the supply chain".
Nomura analysts estimate that Beijing has a six trillion yuan funding gap, in part due to a collapse in land sales — a key source of funds — and because of the Omicron wave.
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Economy in focus
China's strategy of quashing virus clusters with mass tests and lockdowns as well as forcing factories to halt work and clotting supply chains has slowed down economic growth in the country in recent months.
Premier Li Keqiang last week called for "reasonable" expansion in the second quarter as fears mount for the vaunted official annual growth target of around 5.5 percent.
Pump priming hard-hit provinces with infrastructure schemes has emerged as a key tool to create jobs and drive growth in local economies flatlined by the virus and a concurrent collapse in receipts from land sales to developers.
The latest virus outbreak was China's worst since early in the pandemic and caused its key business hub Shanghai to be sealed off for two months.
While the city has since eased curbs as cases drop, a rebound will be gradual — businesses remain jittery over future flare-ups and there is a backlog of goods at the port.
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