China deploys first 2026 policy financing funds to spur investment

BEIJING, Sept 3 (Reuters) - ‌China Development ​Bank ​has disbursed 460 million yuan ($68.47 million) under the first tranche of China's 2026 policy-based ‌financing tool, state media reported on Thursday, ⁠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% 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% ​in the first quarter.

($1 = 6.7184 Chinese yuan renminbi)

(Reporting by Kevin Yao; editing by Philippa ‌Fletcher)

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