Beijing’s investment plan lifts mainland China’s stock markets
Shanghai exchange climbs after government rolls out funding strategy for 1,043 projects
Shanghai's stock market staged its biggest rally in four months, thanks to the government's plan to seek private capital for projects worth 1.97 trillion yuan (HK$2.5 trillion) to help revive sluggish investment.
The Shanghai Composite Index was up by 3.35 per cent to close at 4,813.80 yesterday, posting the biggest single-day rise since January 21, while the Shenzhen market ended 1.9 per cent higher. The two markets saw combined transactions amounting to more than 2 trillion yuan.
The National Development and Reform Commission (NDRC) yesterday rolled out investment plans covering 1,043 projects under the public-private-partnership (PPP) model. It came on the same day state-run published a long article stressing the key role of investment in bolstering growth.
"Whether savings can be transformed into effective investment to help stabilise growth has become a key issue," the ruling Communist Party's mouthpiece said, citing an unidentified "authoritative source".
The paper, which in recent months has run a string of articles to inform the public about the stock markets and the nation's economic outlook, is seen by investors as an important window on Beijing's thinking on policy.
Growth in the world's second-largest economy risks losing further steam after hitting a six-year low of 7 per cent in the first quarter, as excess capacity and financing bottlenecks have curbed investment in new infrastructure and property projects.
