The Chinese cash infusion has shown some promising effects on its economy, along subsequent exchange traded funds (ETFs), and now the infrastructure sector may gain on promises of more investment.
Chinese Premier Wen Jiabao promised $10 billion in additional infrastructure investment after stating that China’s stimulus package was showing results, according to The Chosun Ilbo. The China-ASEAN Fund on Investment Cooperation would support infrastructure development in the region.
Wen has been calling for more cooperation from Asian nations to combat the economic crisis, reports Dow Jones Newswires. In addition to the $10 billion infrastructure fund, China also announced $15 billion in credits and loans to help South East Asians cope with the crisis.
Increases in consumer spending, industrial output, investment and an estimated 2.7 million new jobs are seen as a result of the government’s stimulus package.
But China has reported a 6.1% growth rate in the first quarter, its slowest growth rate in a decade, due to diminished demand for its exports.
- iShares S&P Global Infrastructure Index (IGF): down 13.4% year-to-date; China is 6.3%
- iShares FTSE/Xinhua China 25 Index (FXI): up 11.5% year-to-date
Max Chen contributed to this article.
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