China has introduced its latest measures to rise its economy. On the 8th, the Standing Committee of the National People's Congress approved an increase of 6 trillion yuan in the local government debt limit, which will be used to replace stock implicit debts. In addition, local government special bond can also be used to replace implicit debts with a total of 4 trillion yuan, making it the largest measure to resolve local debts in recent years. According to Xinhua News Agency, the 12th meeting of the 14th National People's Congress Standing Committee ended in Beijing on the 8th, approving the "State Council's proposal to increase the local government debt limit for the replacement of stock implicit debts", increasing the local government debt limit by 6 trillion yuan for the replacement of stock implicit debts. The Vice Chairman of the Financial and Economic Committee of the National People's Congress, and the Director of the Budget Committee of the Standing Committee of the National People's Congress, Xu Hongcai, introduced at a press conference that all the newly added debt limits are arranged as special debt limits, which will be approved and implemented in three years. According to this arrangement, the local government special debt limit will increase from 29.52 trillion yuan to 35.52 trillion yuan by the end of 2024. In addition, the Minister of Finance of China, Liu Kun, said on the 8th that starting from 2024, China will allocate 800 billion yuan from the newly added local government special bond every year for five consecutive years to be used for debt reduction, with a total of 4 trillion yuan for replacing implicit debts. After policy coordination, the total amount of implicit debts that local governments need to digest before 2028 will drop significantly from 14.3 trillion yuan to 2.3 trillion yuan. The plan is one of the measures that the Chinese government has introduced to cope with the economic slowdown risks brought by Trump's re-election. It is also the first time that China's authorities have increased the local government debt ceiling since 2015. The Chinese third-quarter GDP grew by 4.6%, the slowest growth rate since March last year, and it remains questionable whether China can achieve its annual growth target of about 5%. The economic slowdown has prompted policymakers to turn to more supportive policies, including interest rate cuts, and support for the stock and real estate markets.
View Original
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
China's new move to rescue the economy! It will inject 10 trillion people's coins to alleviate the local debt crisis.
China has introduced its latest measures to rise its economy. On the 8th, the Standing Committee of the National People's Congress approved an increase of 6 trillion yuan in the local government debt limit, which will be used to replace stock implicit debts. In addition, local government special bond can also be used to replace implicit debts with a total of 4 trillion yuan, making it the largest measure to resolve local debts in recent years. According to Xinhua News Agency, the 12th meeting of the 14th National People's Congress Standing Committee ended in Beijing on the 8th, approving the "State Council's proposal to increase the local government debt limit for the replacement of stock implicit debts", increasing the local government debt limit by 6 trillion yuan for the replacement of stock implicit debts. The Vice Chairman of the Financial and Economic Committee of the National People's Congress, and the Director of the Budget Committee of the Standing Committee of the National People's Congress, Xu Hongcai, introduced at a press conference that all the newly added debt limits are arranged as special debt limits, which will be approved and implemented in three years. According to this arrangement, the local government special debt limit will increase from 29.52 trillion yuan to 35.52 trillion yuan by the end of 2024. In addition, the Minister of Finance of China, Liu Kun, said on the 8th that starting from 2024, China will allocate 800 billion yuan from the newly added local government special bond every year for five consecutive years to be used for debt reduction, with a total of 4 trillion yuan for replacing implicit debts. After policy coordination, the total amount of implicit debts that local governments need to digest before 2028 will drop significantly from 14.3 trillion yuan to 2.3 trillion yuan. The plan is one of the measures that the Chinese government has introduced to cope with the economic slowdown risks brought by Trump's re-election. It is also the first time that China's authorities have increased the local government debt ceiling since 2015. The Chinese third-quarter GDP grew by 4.6%, the slowest growth rate since March last year, and it remains questionable whether China can achieve its annual growth target of about 5%. The economic slowdown has prompted policymakers to turn to more supportive policies, including interest rate cuts, and support for the stock and real estate markets.