September economic data is set to be released soon. Experts hold that with capital from multiple channels accelerated for deployment, the growth rate of infrastructure investment is expected to rebound in September, and the investment structure will continue to upgrade toward new and high-quality growth. Recently, incremental policies including cutting interest rates and expanding the coverage of Pledged Supplementary Lending (PSL) and making full use of leftover local government debt quotas have been rolled out one after another, which will provide strong support for infrastructure investment. Combined with joint efforts to stimulate private investment vitality, private investors’ confidence is also expected to rise further.

Positive signs emerge in investment

Experts said that as the traditional construction peak season arrives, a series of high-frequency data indicates accelerated project construction progress. The growth rate of infrastructure investment is likely to pick up in September, and the investment structure keeps improving toward new and high-quality development.

By sector, data from the National Bureau of Statistics shows that the business activity index of the construction industry stood at 50.3% in September, up 3.4 percentage points month-on-month. He Hui, Vice President of China Federation of Logistics & Purchasing, analyzed that the arrival of the traditional production and construction peak season in September, together with accelerated progress in property delivery guarantees, existing housing renovation and urban renewal activities, drove a marked improvement in the prosperity level of the construction industry from the previous month, pushing the business activity index of the construction industry above 50%.

Some leading indicators also point to faster project construction. Wen Bin, Chief Economist of China Minsheng Bank, introduced that the operating rate of petroleum asphalt plants was 23.0% in September, roughly flat with the previous month. The cement shipment rate and mill operating rate rose by 2.2 and 3.4 percentage points month-on-month to 40.5% and 39.5% respectively.

In terms of fund support, 620.4 billion yuan of new special-purpose bonds were issued in September, an increase of 101.5 billion yuan month-on-month and 207.3 billion yuan year-on-year. Meanwhile, new policy-based financial instruments have been intensively deployed since September, effectively supplementing project capital and speeding up project construction.

Zhou Guannan, Co-Director of Huachuang Securities Research Institute, stated that improved weather conditions and the release of the "Golden September" peak season effect contributed to the rebound in the construction business activity index, reflecting faster construction progress. Major projects under the "Six Networks" initiative and the 15th Five-Year Plan are moving forward in an orderly manner, and the growth rate of infrastructure investment is projected to improve.

At the same time, investment in new infrastructure and new industries is expanding rapidly, and the investment structure continues to upgrade. Data released by the State Information Center under the National Development and Reform Commission shows that in September, the bid amount of new infrastructure projects such as computing power and data infrastructure rose by 50.4% year-on-year. Capital investment in cutting-edge fields including artificial intelligence and humanoid robots more than doubled from a year earlier.

Expanding funding sources for project construction

Sufficient fund support is indispensable for project construction. Since late September, incremental policies such as lower PSL interest rates, expanded PSL coverage and the utilization of leftover local government debt quotas have been launched to broaden funding channels for projects, sending a strong signal of stabilizing investment and growth.

The newly rolled-out incremental policies explicitly increase support for the "Six Networks". The People’s Bank of China proposed to include the development of the "Six Networks" within PSL support scope, guiding policy banks to scale up financial support for "Six Networks" construction. The Ministry of Finance clarified that among the 550 billion yuan of leftover local government debt quotas allocated to local authorities, leftover special-purpose bond quotas amount to 250 billion yuan. These quotas will be assigned to regions with actual project funding needs in the fourth quarter of this year, with priority given to major economic provinces. The funds will first cover funding needs of ongoing projects, while newly-launched projects will focus on key areas including the "Six Networks", to give full play to the driving effect of government investment.

"Of the 550 billion yuan in leftover local government debt quotas, the special-purpose bond portion clearly supports the construction of the 'Six Networks'. Since special-purpose bonds can serve as project capital, it means projects in key sectors will have wider funding sources," said Wu Qiying, Senior Macro Analyst at GF Securities.

Yuan Haixia, President of China Chengxin International Research Institute, believes that the expansion of PSL coverage continues to serve key sectors and leverage effective investment. It further meets the need for infrastructure development under the 15th Five-Year Plan to shift from traditional fields to new infrastructure. It is expected to work together with tools such as fiscal interest discounts to facilitate the early launch of major projects and accelerate project delivery in the fourth quarter.

Yuan Haixia projected that government bonds and new policy-based financial instruments will likely be deployed faster in the fourth quarter. Coupled with strengthened supervision over projects and funds by the National Development and Reform Commission and the Ministry of Finance, this will deliver solid support for full-year infrastructure investment.

Stimulating vitality of private investment

In the effort to stabilize investment, it is particularly important to enable private capital to invest boldly, willingly and feasibly. Relevant authorities are taking measures to stimulate private investment vitality, including expanding opportunities for private enterprises to participate in high-quality projects and strengthening factor guarantees.

On the one hand, authorities regularly recommend major investment projects to private enterprises. The Private Economy Development Bureau of the National Development and Reform Commission publicly promoted two batches of 88 investment projects to private enterprises on September 10 and September 29 respectively. The projected total investment stands at 113.8 billion yuan, with 31.1 billion yuan of private capital to be introduced. These projects cover transportation, logistics, water conservancy, energy, manufacturing and other sectors. Local governments are also rolling out projects to attract private enterprise participation. For example, Shanxi previously released its third batch of projects recommended for private capital in 2026, consisting of 30 projects with a planned total investment of 30.4 billion yuan, of which 14.4 billion yuan of private capital is planned to be introduced.

On the other hand, stronger guarantees for factors including capital are being put in place. New policy-based financial instruments launched recently have supported the construction of multiple private investment projects. According to data released by China Development Bank, since September, the bank’s new policy-based financial instruments have injected 60.85 billion yuan into 153 projects with a total investment of 1.4 trillion yuan. All the funds are used to supplement the capital of private investment projects and projects involving private capital participation.

"Policies to stabilize private investment have kept intensifying recently," Wen Bin commented. The accelerated deployment of the 800 billion-yuan new policy-based financial instruments and the concentrated promotion of major projects in transportation, energy, water conservancy and other fields to private enterprises by the NDRC help ease constraints such as insufficient project capital and limited supply of high-quality projects.

Source: Shanghai Securities News