The State Council, China’s Cabinet, outlined a 19-point policy package on Wednesday, including another 300 billion yuan that state policy banks can invest in infrastructure projects, on top of 300 billion yuan already announced at the end of June. Local governments will be allocated 500 billion yuan of special bonds from previously unused quota.

At a meeting chaired by Premier Li Keqiang, the State Council vowed to make use of “tools available in the toolbox” to maintain a reasonable policy scale in a timely and decisive manner, according to a readout from state broadcaster CCTV.  

Economists were relatively downbeat on the measures, while financial markets were muted. Yield on 10-year government bonds rose 1 basis point to 2.64% in early Thursday trading. China’s CSI 300 Index rose as much as 0.6% in morning trading before paring gains to trade up 0.1%.

Goldman Sachs Group economists said the measures announced on Wednesday won’t be enough to lift the overall growth rate from the 3% they’re projecting.

The latest steps “could help offset the sharp contraction in government revenue and support infrastructure investment growth to some degree”, the economists including Maggie Wei said in a note. But overall growth “will remain sluggish” barring major policy easing measures, due to the very weak property sector and disruptions from Covid controls, they said.

Read More: These are China’s 19 new measures to bolster economic growth

The State Council also said the economy won’t be flooded with excessive stimulus, and that China won’t “overdraw” on the room it has to take more policy action to protect longer-term growth – reiterating the relatively cautious stance officials have taken toward stimulus this year.

The meeting sent a signal: “Don’t expect massive additional stimulus,” according to Bruce Pang, head of research and chief economist for Greater China at Jones Lang LaSalle. He added that the language used in the announcement suggested “the possibility of adopting extraordinary tools such as special sovereign bonds or increasing the official budget deficit has decreased.”

The property slump and China’s stop-start reopening from Covid lockdowns have put the government’s official gross domestic product growth goal of “around 5.5%” well out of reach. Officials have downplayed the target in recent months as they stick to the Covid Zero policy of eliminating infections, with economists polled by Bloomberg projecting growth of less than 4% this year.

The 500 billion yuan in additional local government special bonds this year is smaller than what some analysts had expected, given the estimated amount of unused quota could be as high as 1.5-trillion yuan. 

Local authorities have accelerated their issuance of the bonds – a major source for infrastructure investment – this year compared with previous years, and have used up most of the 3.65 trillion yuan in official quota set early this year.

Nomura Holdings Inc. economists led by Lu Ting said Thursday the measures aren’t “game-changers”. That’s partially because the property sector is still in deep trouble, they wrote in a research note, pointing out that in previous easing cycles, real estate played a major role in pumping up credit demand among households, companies and local governments.

The 19 measures come on top of several recent stimulus steps: policy banks have been allocated a total of 1.1-trillion yuan of financing for infrastructure projects since June; the central bank delivered a surprise 10 basis-point interest rate cut last week; and in May, Beijing announced about 1.9-trillion yuan of support measures in a 33-point policy package, including targeting small businesses. 

The State Council on Wednesday also pledged to approve a batch of infrastructure projects. Local authorities are encouraged to use city-specific credit policies to support reasonable housing demand, it said.

Amid an energy crunch triggered by drought, support was also directed toward state-owned power generation companies, which will be allowed to sell 200 billion yuan of bonds. Another 10-billion yuan of subsidies will be offered to the agricultural sector. 

The State Council also pledged to continue lowering financing costs and introduce measures to support the development of private businesses and platform companies. BM