China’s finance ministry disappointed markets by not announcing a broad-based fiscal stimulus package at a Saturday press conference. Instead, they focused on addressing local government debt and the property market, which are dragging down economic growth.
Analysts still anticipate mild stimulus measures, such as increasing the fiscal deficit ratio, issuing more special treasury and local government bonds, and implementing tax cuts.
The ministry revealed changes like raising debt ceilings, utilizing unused government bond quotas, providing fiscal support for the property market, and capital replenishment for state-owned banks.
Finance minister Lan Foan mentioned that cash-strapped local governments could access 2.3 trillion yuan in special bond funding for the last quarter of the year. Additionally, a large-scale debt ceiling increase will help swap local governments’ hidden debts.
Deputy finance minister Liao Min also discussed using special bonds to buy idle land and commercial properties from struggling developers in the property sector.