ajor Projects Nationwide Accelerate Progress; More Pro-growth Policies Roll Out in Q4

As the fourth quarter kicks off, local governments are entering the final sprint to hit annual economic targets. Beijing, Shaanxi, Yunnan and other regions have recently rolled out intensive arrangements to push forward major projects, which serve as a key lever to expand investment and stabilize growth in Q4.

The global R&D center and smart manufacturing base of Hangyu Intelligent Manufacturing broke ground on October 13 at the Beijing Economic and Technological Development Zone. Listed as one of Beijing’s key projects under the Three Initiatives Involving 100 Major Projects Each in 2026, the project focuses on R&D and industrial application of disruptive vehicle body manufacturing technologies, and innovatively builds a second-level fabrication system for beam-and-tenon car bodies. Its total investment stands at approximately 1.03 billion yuan.

An official with the Beijing Municipal Development and Reform Commission said that Beijing will ramp up industrial investment in the fourth quarter. It will speed up the launch of more projects in artificial intelligence, high-end equipment manufacturing, biomedicine and other key sectors. Meanwhile, a new batch of major investment projects will be promoted to private capital, with total investment of recommended projects reaching no less than 200 billion yuan for the whole year.

The Shaanxi Provincial Department of Water Resources has set a binding annual target of 51 billion yuan in water conservancy investment. It will push ahead nine major water projects in successive batches, including Phase III of the Hanjiang-to-Weihe River Diversion Project, the Baojixia Weihe Water Diversion Project, modernization upgrade of the Donglei Yellow River Pumping Irrigation District, and the Jiaoyan Water Control Project. Rigid deadlines for groundbreaking have been set for late September, late October and year-end.

Yuxi City in Yunnan Province has confirmed 63 major industrial projects worth 10 billion yuan to start construction in Q4 2026, including 39 projects with investment above 100 million yuan. These projects cover industries such as non-energy manufacturing, energy industry, agriculture, trade and logistics, cultural tourism and digital economy, with new starts across all counties, districts and the Yuxi High-tech Zone.

Since the start of the fourth quarter, Shanxi, Hebei, Chongqing and other provinces and municipalities have held meetings to boost effective investment. Local priorities include energy transition, advanced manufacturing, development of the six infrastructure networks, commercialization of scientific and technological achievements, and small yet high-quality livelihood projects.

“Accelerating construction of practically useful projects in the fourth quarter can shore up current demand and prevent short-term economic slowdown from undermining long-term construction capacity,” said Zhang Yi, chief economist at Financial Street Securities, in an interview with the Shanghai Securities News. Most major projects span multiple years. Q4 efforts should not only generate tangible workloads this year but also lay the groundwork for steady construction momentum next year. It is wrong to simply equate stable investment with a year-end construction spree.

Data released by the National Bureau of Statistics shows infrastructure investment fell 4.2% year-on-year in the first three quarters. However, investment in information transmission jumped 30.8%, investment in air transport rose 13.8%, and water transport investment increased by 13.5%.

Luo Zhiheng, chief economist at Yuekai Securities, commented that the slowdown in infrastructure investment stems from proactive adjustments to improve investment efficiency plus a shortage of high-quality projects, a natural phase amid the shift from old to new growth drivers. While facing slower investment growth, we should also notice the improved investment structure, which helps raise the efficiency of fiscal spending and lower debt risks.

Local government bond issuance is drawing to a close this year. Data from Enterprise Early Warning Platform shows that as of October 25, China had issued roughly 9.5 trillion yuan in local government bonds, including 4.6 trillion yuan of new local government bonds, accounting for around 87% of the annual new debt quota.

Zheng Zhajie, Minister of the National Development and Reform Commission, stated at a private enterprise forum on October 10 that the fourth quarter is the final push for annual economic performance and a critical window to consolidate the economic recovery. The central government will accelerate the groundbreaking of major projects outlined in the 15th Five-Year Plan and the implementation plan for the six infrastructure networks, so as to unleash domestic demand potential.

The Ministry of Finance said it will promptly advance the allocation of part of the 2027 new local government debt quota. It will guide local authorities to make early planning, complete budget preparation and other formalities ahead of schedule, so that bond issuance can start as early as January next year.

In recent years, the Ministry of Finance has pre-allocated up to 60% of the annual new local debt quota for the following year. Given the 5.2 trillion yuan new local government debt quota for 2026, the pre-allocated quota for 2027 will not exceed 3.12 trillion yuan in theory.

Against the backdrop of successive policy support, whether investment can bottom out and rebound has become a major market concern.

Zhang Yi expressed optimism over major project investment in Q4. He stressed that investment in major projects should play a more proactive role in stabilizing demand. The key is to turn policy funding into real construction workloads, and further translate them into corporate orders, jobs and household income.

Luo Zhiheng projected that infrastructure investment will pick up marginally in Q4, leading to an overall low start followed by strong growth for the whole year. China still boasts huge investment potential in transportation, energy, water conservancy and urban renewal. With deeper reform of the investment and financing system, infrastructure investment will return to steady growth.

Source: Shanghai Securities News