Beijing ordered state-owned policy banks to set up an 800 billion yuan ($120 billion) line of credit for infrastructure projects as it leans on construction to stimulate an economy battered by coronavirus lockdowns.

The announcement, made at a State Council meeting chaired by Premier Li Keqiang, could help finance a significant chunk of infrastructure costs this year. Bloomberg Economics estimated China’s infrastructure spending came to 23 trillion yuan in 2021. Large policy lenders include China Development Bank.

But it won’t be enough to offset the property downdraft for demand.

This rally is more or less seasonal and we could see prices stable through July if that is the case.

Or not, if the Fed finally crashes the broader commodity complex.

There’s plenty of iron ore just plenty of speculators too.

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Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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