Official announcements from China's top legislative body or major news outlets

China Mulls 10 Trillion Yuan Fiscal Boost Amid Record 366% Debt Ratio

Oct 29, 2024, 08:37 AM

China's top legislative body is considering approving a new fiscal package worth over 10 trillion yuan ($1.4 trillion) to bolster the economy and address local governments' debt risks, according to multiple sources. The proposal, expected to be approved on November 8, includes raising fresh debt through special treasury and local government bonds over the next few years. This move comes as China's debt-to-GDP ratio reached a record 366% in the first quarter of 2024. The fiscal package would allocate approximately 6 trillion yuan to address local governments' debt risks and up to 4 trillion yuan to acquire idle land and properties. Analysts expect China to allow about 6 to 10 trillion yuan of new bond issuance by local governments to swap out existing hidden debt to alleviate funding stress and support economic growth amid concerns over China's growing debt levels.