Beijing, September 29, 2025
In a bold move to revive its faltering economy, China announced on Monday the launch of policy-based financial instruments totaling 500 billion yuan ($70 billion), aimed at supercharging investment projects and stabilizing growth in the face of mounting domestic and global pressures. The initiative, revealed by the National Development and Reform Commission (NDRC), the country's top economic planner, signals Beijing's determination to deploy targeted fiscal firepower as fixed-asset investment grinds to a near halt.
The new tools will provide critical capital injections to supplement funding for major infrastructure and development projects, enabling faster project launches and construction. "The total scale of these new policy-based financial instruments is 500 billion yuan, all of which will be used to supplement project capital," NDRC official Li explained during a press briefing. Local governments have been urged to accelerate approvals and executions, focusing on "effective investment" to underpin stable economic expansion.
This announcement comes at a precarious moment for the world's second-largest economy. Official data released last week showed fixed-asset investment—encompassing everything from factories and roads to tech upgrades—growing by a meager 0.5% in the first eight months of 2025, the weakest pace outside the COVID-19 disruption years. August's economic indicators painted an even bleaker picture, with industrial output and retail sales missing expectations amid weakening consumer confidence and a protracted property sector slump.
Economists view the $70 billion package as a timely countermeasure. "This could help cushion the weakening investment growth seen in July and August," noted analysts at MarketScreener, highlighting how the funds will leverage additional bank loans and private financing to multiply their impact. The instruments draw on China's three major policy banks—likely the China Development Bank, Agricultural Development Bank of China, and Export-Import Bank of China—which will raise capital through bonds or other channels to acquire equity stakes in priority initiatives.
While specifics on project allocations remain fluid, sources familiar with the planning suggest a tilt toward high-tech and green sectors. This aligns with earlier hints from Beijing's top planners in May, when a similar $70 billion capital pool was floated to fast-track AI, digital economy, and consumption-boosting infrastructure as a buffer against escalating U.S. tariffs. The People's Bank of China is expected to provide liquidity support, ensuring smooth rollout.
The unveiling has sparked cautious optimism in global markets. Asian shares ticked higher in early trading, with the Hang Seng Index gaining 0.8% on news of the stimulus. Foreign investors, who have trickled back into China's $19 trillion stock market after years of dubbing it "uninvestable," see the move as a green light for renewed engagement. "China is now a standalone asset class they cannot ignore," said Zheng Yuchen, chief investment officer at Allianz Global Investors' China fund unit. Foreign direct investment, however, remains down 13.2% year-to-date, underscoring the urgency of these measures.
Yet, challenges loom large. Provinces have already overshot their 2025 debt restructuring caps by 400 billion yuan ($56 billion), siphoning funds that could otherwise fuel investment. Broader fiscal reforms, including deeper support for consumption and small enterprises, are in the works, but execution risks persist—earlier stimulus efforts, like a 500 billion yuan re-lending program for state-owned enterprises, have rolled out sluggishly.
As China grapples with a post-pandemic recovery shadowed by trade tensions and demographic shifts, this $70 billion lifeline represents more than just financial engineering; it's a high-stakes bet on investment-led resurgence. Whether it reignites the dragon's fire or merely buys time remains the unfolding story—one that investors from Shanghai to Wall Street will watch with bated breath.