China has started accepting applications for an 800 billion yuan ($119 billion) funding programme to support local government projects and help the economy grow. The move comes as China’s investment in buildings, factories and infrastructure fell 6.7% in the first seven months of 2026. The government wants to increase investment, but local officials have been more careful about spending because of concerns over wasteful projects and rising local debt.
Local governments are now sending suitable projects to Beijing for approval. However, Caitong Securities said the money could take at least a month to reach the projects. This means the programme may have only a limited effect on China’s economy this year. The funding programme was announced in March and is bigger than last year’s 500 billion yuan plan. It is meant to kick-start important projects by providing initial funding and attracting more money from banks and private investors.
Caitond estimates that the 800 billion yuan could eventually support about 10 trillion yuan of total investment. However, because of delays and a lack of suitable projects, only around 2 trillion yuan may directly boost investment this year.
China’s economic growth is also slowing. GDP grew 4.3% in the second quarter, down from 5% in the first quarter. Goldman Sachs expects the programme to add about 0.5 percentage points to economic growth, with most of the benefit likely to come in late 2026 and early 2027.
