Construction bank FHA has set a new target to create 20 million new construction jobs by 2020, a move that will boost the economy by at least 20%.
The announcement comes as China Construction Industry Corporation, the country’s biggest construction company, prepares to announce its second quarterly profit on Monday, adding to the pressure on the world’s third-largest economy to show progress on tackling a long-standing and growing global trade deficit.
The bank said in a statement that it would invest at least $2.5 trillion over the next three years, bringing its total investment to $25 trillion.
The bank is also the biggest lender of loans to other countries, with an average $1.6 trillion lending to the US, Britain, Germany and Japan, according to the International Monetary Fund.
The new funding will be used to upgrade infrastructure, expand research and development and modernise manufacturing, the bank said.FHA, which is based in New York and is one of the world´s largest construction lenders, said its investment would go to upgrading infrastructure, upgrading research and developing and modernising manufacturing, which the bank has previously said is essential for the country´s growth and jobs.
Its $1 trillion investment in new capital will be spread across four capital markets: China, India, the US and Canada.
The announcement came just weeks after FHA said it was opening a second branch in Shanghai and adding the countrys largest bank, HSBC, to its existing operations in the capital.
The two branches were the first time the two companies have collaborated on building a single branch.
Finance Minister Benjamin Zang, who took over the role of bank chief last week, said in March the two banks are collaborating to accelerate investment in infrastructure and research and innovation.
Fannie Mae is one lender that will be part of the new bank, as the bank plans to make its first foray into the housing market in 2020.
Fannie has a history of backing projects that are seen as critical to helping people get into the US housing market, and has worked with several other banks to help build more of the country`s new housing stock.
Fears have grown about the risks of a Chinese government push to restrict the number of home loans and limit financial institutions’ role in housing finance.
The bank has been a key player in pushing China into a more pro-business, more consumer-friendly stance and to curb speculation in the Chinese economy.