China deploys first 2026 policy financing funds to spur investment

[BEIJING] China Development Bank has disbursed 460 million yuan (US$68.47 million) under the first tranche of China’s 2026 policy-based financing tool, state media reported on Thursday (Sep 3), as Beijing ramps up efforts to bolster investment and economic growth.

The funds from China’s largest policy bank will be used to replenish capital for major construction projects backed by private investors, state media said.

The first tranche covered three projects in battery manufacturing, high-end nickel-chromium materials and transport infrastructure, according to state media.

Reuters reported in August that China had begun accepting applications for an 800 billion yuan policy-based financing programme for local government projects aimed at supporting economic growth. Analysts said the relatively late rollout could limit its impact this year.

The scheme, announced by the government in March, is a quasi-fiscal tool designed to provide project capital and leverage larger amounts of private and bank financing for infrastructure and strategic sectors. Beijing increased its size from 500 billion yuan in 2025.

China’s economic growth slowed to 4.3 per cent in the second quarter, the weakest pace in more than three years and below market forecasts, weighed down in part by a decline in investment. The economy grew 5.0 per cent in the first quarter. REUTERS