Infrastructure approvals quadrupled

17 projects okayed as nation accelerates public spending

China has almost quadrupled the value of fixed-asset investment projects approved in July, as it looks to accelerate infrastructure spending to boost a cooling economy.

China gave the greenlight to 17 fixedasset investment projects in July, worth a combined 77.69 billion yuan ($11.24 billion), Zhao Chenxi, an official at the National Development and Reform Commission (NDRC), said on Thursday.

That compared with approvals for 20.8 billion yuan of spending in June, according to Reuters calculations.

China 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 thus far.

China 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 reduce debt levels.

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

The country’s fixed-asset investment rose 5.5 percent year-on-year in the first seven months of the year, down from 6 percent for January-June, data from the National Bureau of Statistics showed Tuesday.

Private investment, which accounts for about 60 percent of the overall fixed-asset investment, rose at a faster pace. Meanwhile, investment in high-tech manufacturing jumped 12.2 percent year-on-year, outpacing the overall investment growth.

While announcements of big projects are starting to come thick and fast, analysts caution they have long lead times and they may not begin to arrest the decline in China’s economic growth until next year.

“The key headwinds were the same as before – slowing investment [especially infrastructure] and an ongoing unwind of shadow credit due to deleveraging measures,” analysts from UBS China wrote in a recent note, referring to a crackdown on riskier lending that is shutting down an important source of funds for small, private companies.

China is on track for an annual growth rate of around 6.5 percent this year.