China is considering more than 1 trillion yuan in fiscal stimulus over the next three years, according to a latest report from the China International Capital Corporation (CICC).
A total of 1.2 trillion yuan ($188 billion) to 1.5 trillion yuan may be taken from the government coffers to replenish the capital for investment projects, mainly those already approved by the authorities, the investment bank estimated.
The stimulus is likely to drive a total potential investment of 5 trillion yuan to 7 trillion yuan in the next three years, or 2.5 percent to 3.4 percent of the 2015 GDP each year, it said.
Investment projects will be funded by not only policy banks but also commercial lenders and private investors via the public-private partnership, Xinhua reported.
The report came after the Ministry of Finance put forward multiple fiscal policies aimed at stabilising growth on Tuesday, such as coordinating funds to accelerate project construction, activating idle money and widening tax breaks.
The move indicated that China's fiscal policy will be "firing on all cylinders to support growth", the CICC said.
China is battling a property downturn, industrial overcapacity, sluggish demand and struggling exports, which dropped growth to 7 percent for the first half of the year.
Fiscal policy has moved to centre stage in growth stabilisation, as the room for monetary loosening became more constrained after several interest rate cuts and fiscal deposits continued to increase, according to the CICC.
