On Tuesday, 26 April, China’s top economic decision-making body gave a strong push to the building of a “modernised infrastructure system” that encompasses smart grids, hydrological webs and broadband networks. The Central Economic and Finance Committee, chaired by President Xi, was convening for the first time in 2022.
Since the committee was established in March 2018, every meeting has set the tone for a particular policy issue with wide-ranging implications for the Chinese economy. At the ninth meeting, in March 2021, the leaders outlined the main strategies for China to peak carbon emissions before 2030 and reach carbon neutrality before 2060, translating President Xi’s 2020 climate pledge into a national policy imperative. The subsequent gathering discussed “common prosperity”, a drive to reduce inequality in society.
Tuesday’s 11th meeting will likely inject considerable political momentum and financial resources into infrastructure building. Priority areas of transport, energy and hydrology were identified, as well as so-called “new infrastructure” that includes elements such as cloud computing and broadband networks. There is also a strong message about upgrading the nation’s infrastructure to protect national security.
The summary of the meeting released by state media did not make an explicit link between the new emphasis on infrastructure and the economic troubles China is currently facing due to Covid-related lockdowns in major economic hubs such as Shanghai. But some international media and analysts suggested the move was a direct response to “growth headwinds from Covid restrictions and continued property downturn.”
No price tag was set for this renewed push, but emphasis was put on increasing fiscal spending and ensuring the financial needs of infrastructure projects. Meeting the demand from such projects for land, ocean and energy use was also highlighted.
The environmental implications of the infrastructure push are likely mixed. Distributed smart grid and “low-carbon energy bases” were prominently mentioned, as was the national water grid. But the massive build-out of new roads, airports and railways may push up demand from heavy industries such as cement and steel, both subdued of late by the weakening real-estate market.