China is accelerating bond issuance to support government-led investment projects as part of efforts to sustain economic growth for the remainder of the year, following a rare high-level meeting convened by the country’s top economic planner.
The National Development and Reform Commission (NDRC) brought together key officials from central government bodies on Friday, including the ministries of industry and information technology, housing and urban-rural development, and transport, as well as senior leaders in water resources and energy sectors. The meeting emphasized maximizing investment potential in areas such as technological innovation, industrial upgrading, and urban renewal, while speeding up the deployment of policy-based financing instruments and local government special bonds for large infrastructure projects.
According to a briefing by a state news agency, officials pledged to intensify investment efforts, signaling a policy shift that prioritizes investment over consumption as a driver for growth. Song Yu, chief China economist at UBS Securities, described the event as “unusual” in terms of high-level participation and noted the government’s recognition of the limitations of consumer goods subsidies to stimulate demand. Song expects that faster fiscal fund disbursement could provide a near-term boost to infrastructure projects and related manufacturing activity, potentially lifting fixed-asset investment growth in the coming months.
Despite these efforts, China’s fixed-asset investment—which includes infrastructure, manufacturing, and property construction—contracted 6.7 percent in the first seven months of the year, a deterioration from the 5.7 percent decline registered in the first half. This underperformance is notable given that 2026 marks the start of the new five-year plan period, traditionally associated with a rise in investment activity as planned projects are initiated.
Peking University economics professor Su Jian commented that recent policy measures largely focus on “non-traditional forms of investments” designed to stabilize the economy amid weakening data trends. Officials at the meeting also affirmed plans to advance projects under the “six networks” initiative, a national infrastructure program aimed at upgrading China’s water, electricity, computing, telecommunications, logistics, and underground pipeline systems by 2030. This initiative marks a further pivot away from real estate development, which has been a primary investment driver but has faced a downturn since 2021, continuing to weigh on economic performance.
China’s economic growth slowed to 4.3 percent in the second quarter, representing the weakest quarterly expansion since late 2022. The deceleration was driven by subdued domestic consumption and investment, although exports remained robust. Authorities have set a growth target of between 4.5 and 5 percent for the year.
Data from investment bank Goldman Sachs indicates that government bond issuance has already accelerated this year, with approximately 61 percent of the government’s 11.9 trillion yuan annual bond quota issued by the end of last week. The increased issuance is expected to fund infrastructure and other major projects designed to support economic expansion as domestic demand recovery faces challenges.