Infrastructure investment to speed ahead in Q3

Investments in infrastructure are expected to accelerate in the third quarter, supported by increased local bond issuances, market analysts said.

The comments came as the finance department of Fujian province said recently its government debt quota would increase by 182.4 billion yuan ($25.1 billion) this year, or 3.7 percent higher than the previous year. This signifies the allocation of the second batch of new government debt quotas for 2024.

Of the increase, 168.4 billion yuan has been earmarked for special bonds and will be used to achieve faster completion of major existing projects, the finance department said in an online statement.

According to market tracker Wind Info, as of Tuesday, local governments have issued a total of 3.3 trillion yuan in government bonds this year, including 1.35 trillion yuan in new special bonds.

"With the national quota for new local government special bonds being 3.9 trillion yuan — an increase of 100 billion yuan from the previous year — the issuance progress in the first half of the year has been less than 50 percent. The second half will hence see faster and more frequent issuance by local governments," said Long Chaocan, an investment consultant with China Galaxy Securities Co Ltd.

According to plans that have so far been released by multiple local governments, effective investment is highlighted in enhancing the efficiency of bond fund usage. Authorities are promoting investment for key existing projects that "can quickly translate into tangible work after relocation" to stabilize growth momentum amid the nation's pursuit of high-quality development, Long said.

"Under-construction infrastructure projects, such as railways and major water conservancies, are receiving major fund support during the rest of the year, considering their role is still fundamental in driving the nation's economy amid headwinds," he added.

China has scaled up investment in railway construction since the beginning of the year, the country's railway operator said.

During the January-May period, fixed-asset investment in the country's railway sector reached 228.47 billion yuan, marking a 10.8 percent increase from the same period last year, according to China State Railway Group. The investment is up from 184.9 billion yuan in the first four months of this year.

Heeding the nation's call to boost integrated regional development, railway construction nationwide continued to gather steam nationwide, as reflected by the latest project milestones reported by State builders.

China Railway 24th Bureau Group Corp (CR24G), a unit of China Railway Construction Corp, said it had started drilling the foundations for two major bridges across the Dongyang River and Wuyi River in Jinhua, Zhejiang province, marking the start of substantial construction for the Jinhua railway hub expansion project.

This expansion is Jinhua's largest-ever local railway investment and aims to alleviate capacity issues on the Jinhua-Yiwu sector along the Shanghai-Kunming High-speed Railway and boost regional transport infrastructure.

Also in the East China province, the Wubailing Tunnel on the Jinhua-Jiande High-speed Railway was bored through recently by CR24G construction workers. Successful digging of the 2.4-kilometer tunnel marks a significant progress toward its scheduled opening, the State builder said.

Located in Jiande, Zhejiang, the dual-track tunnel, with its maximum depth reaching 185 meters, is built for trains running at a designed speed of 250 kilometers per hour. Overcoming complex geological challenges, the project team employed advanced geological forecasting and strict safety measures to ensure controlled, high-quality construction.

Connecting the three cities of Jinhua, Lanxi and Jiande with China's major railway network, the Jinhua-Jiande High-speed Railway, which is scheduled to open before October 2025, aims to help cities further develop tourism and provide a faster link between Zhejiang and inland provinces.