China nearly quadruples infrastructure approvals in July

BEIJING: China almost quadrupled the value of fixed-asset investment projects approved in July as Beijing looks to accelerate infrastructure spending to boost the cooling economy.

China gave the greenlight to 17 fixed-asset investment projects in July, worth a combined 77.69 billion yuan (US$11.24bil), Zhao Chenxi, an official at the National Development and Reform Commission (NDRC), told reporters.

That compared with approvals for 20.8 billion yuan of spending in June, Reuters calculated from official data.

Beijing is accelerating infrastructure spending and rolling out other support measures for businesses to cushion the economy as it braces for the impact of escalating US trade tariffs.

Data this week showed China’s investment growth has slowed to a record low and consumers are turning cautious on spending.

The NDRC also said that 1.73 trillion yuan worth of debt-to-equity swap agreements had been signed as of end-July, although only 352 billion yuan has been transacted.

Beijing has encouraged highly indebted firms to enter into such agreements as part of its sweeping, multi-year campaign to reduce risks in the financial system and a mountain of debt.

But some China watchers are now questioning whether the stream of new stimulus measures and easier credit has put Beijing’s debt reduction efforts on the back burner again.

Under debt-to-equity swap schemes, investors get equity stakes in firms and in exchange the firms are able to lower their debt burden, though the specifics of each deal are different and often complex.