China Announces Fiscal Stimulus, 2.3 Trillion Yuan in Debt Measures to Revive Economy

Oct 12, 2024, 02:44 AM

China has announced a series of fiscal stimulus measures aimed at reviving its slowing economy. The Ministry of Finance revealed plans to significantly increase government debt and issue special treasury bonds to support large state-owned commercial banks and replenish their core tier-1 capital. Additionally, local governments will be allowed to issue bonds to purchase unsold homes, providing a boost to the struggling property sector. Finance Minister Lan Fo’an stated that there is significant room to increase the deficit and debt, with 2.3 trillion yuan of special bond funds available for the rest of the year. The measures, which include a hidden debt swap and a total of $325 billion in funds, are expected to address local government debt risks and stabilize the real estate market. However, the lack of specific figures and details on the stimulus package, announced on Saturday, has left some investors disappointed.