China ramps up government debt issuance to boost economy
China has announced a significant increase in its government debt issuance to support local governments, low-income citizens, the property market, and state banks’ capital. Finance Minister Lan Foan revealed that the country will issue 2.3 trillion yuan (€297 billion or $325.5 billion) in special bonds over the next three months to stimulate the economy.
Key Points:
The aid program is the largest since the 2007-2008 global financial crisis, aimed at addressing deflationary pressures and weak consumer confidence. Lan emphasized the importance of additional treasury bonds and counter-cyclical measures to spur growth. With the economy facing challenges due to a downturn in the property market and global trade tensions, the government is implementing various measures to achieve its growth target.
Why is fiscal stimulus crucial for China?
Amid concerns of a slowdown and missed economic forecasts, China’s government is stepping up efforts to support economic growth through debt issuance and policy measures. The stimulus package complements recent initiatives like interest rate cuts and liquidity injections, highlighting the government’s commitment to navigating challenging economic conditions.
dh/lo (AFP, Reuters)