Beijing Opens Infrastructure to Foreign Investment

With GDP growth slowing to 7.5% in the second quarter, Beijing has invited foreign investors to bid on $55 billion worth of urban infrastructure projects. Reuters reports:

The projects include rail transport, roads, rail transit complexes, drainage treatment facilities, waste disposal and heat supply.

The report said private bids will be treated on an equal footing with bids from state-owned firms, and predicted an internal return rate of 8 percent.

[…] Policymakers in China are struggling with a quandary; they want to increase infrastructure spending to prop up economic growth rates which have been sagging this year, but they don’t want to put more high-risk debt on the books of Chinese banks, which are still struggling to digest the bad loans made during the last infrastructure binge in 2009-2010. [Source]

See prior CDT coverage on foreign investment and China’s current economic slowdown.