Infrastructure REITs Empower “New Infrastructure” during the COVID-19 Pandemic: A Chinese Case Study

Abstract

In 2020, the COVID-19 pandemic accelerated the development of new infrastructure in China. Thus, the term “new infrastructure” appeared for the first time and frequently in official documents at the national level, having become a kind of prescription for China’s move away from policies focused on controlling the disease towards those that promote the resumption of economic growth. The financing of this new infrastructure depends on innovative financial instruments, namely real estate investment trusts (REITs). The focus in this article is on the ways in which REITs make new infrastructure possible using as a case study the country’s first domestic REIT designed for the purpose, the China United Fund-Zheshang Asset Management, Shanghai-Hangzhou, Huizhou- Hangzhou Expressway Asset Support Special Plan, which was successfully issued on the Shanghai Stock Exchange on September 24, 2019. The analysis presented here indicates that infrastructure REITs have laid much of the foundation for economic growth in China and provides a basis for some suggestions for making the most of this financial instrument.