China unveils $1.4 trillion package to address mounting local debt crisis

Posted on November 8, 2024   |  

China will provide an extra 6 trillion yuan ($840 billion) to local governments to address hidden debt, with the program lasting until 2026.

Central authorities will issue 800 billion yuan in special bonds annually over the next five years, totaling 4 trillion yuan.

The plan aims to reduce hidden debt from 14.3 trillion yuan to 2.3 trillion yuan by 2028.

Stimulus measures have been ramped up since late September, boosting the stock market.

President Xi Jinping chaired a meeting on September 26, calling for stronger fiscal and monetary support to tackle economic issues, including the real estate downturn.

While the People's Bank of China has already reduced interest rates, any major increase in debt and spending needs approval from the National People's Congress.