China’s stimulus falls short, as a showdown with Trump looms
1 month, 2 weeks ago

China’s stimulus falls short, as a showdown with Trump looms

Live Mint  

ECONOMIST SOMETIMES say that China suffers from the three Ds: debt, deflation and poor demographics. Lan Fo’an, China’s finance minister, said that local governments would be allowed to issue extra bonds worth trillions of yuan to replace riskier “hidden" debts. These hidden liabilities typically belong to local-government financing vehicles, quasi-commercial infrastructure firms Hidden debts have been a nagging worry for China’s rulers and investors for the past 15 years. China’s economic slowdown has hurt tax revenues and the slump in the property market has undermined land sales, a significant source of money for local governments. China’s rulers may be planning to save their fiscal ammunition for the bigger battle they will face if Mr Trump follows through on his threat to start a second, fiercer trade war.

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History of this topic

Debt swaps to rejuvenate local governments
4 weeks, 1 day ago

Debt swaps to rejuvenate local governments

China Daily  

CAI MENG/CHINA DAILY On Nov 8, the Standing Committee of the National People's Congress approved an increase of 6 trillion yuan in the local government special bond ceiling to replace outstanding hidden debt — or liabilities of local governments that are not officially recorded. Local governments will be eligible for local government special bonds worth another 4 trillion yuan over …

Debt swaps to rejuvenate local governments
4 weeks, 1 day ago

Debt swaps to rejuvenate local governments

China Daily  

By Luo Zhiheng | China Daily | Updated: 2024-11-25 09:58 CAI MENG/CHINA DAILY On Nov 8, the Standing Committee of the National People's Congress approved an increase of 6 trillion yuan in the local government special bond ceiling to replace outstanding hidden debt — or liabilities of local governments that are not officially recorded. Local governments will be eligible for …

After $1.4 trillion package, China to cut homebuying taxes to revive ailing economy
1 month, 1 week ago

After $1.4 trillion package, China to cut homebuying taxes to revive ailing economy

Firstpost  

In the latest step to support ailing economy, China is expected to cut taxes for buying homes, according to Bloomberg In the latest step to support its ailing economy, China is expected to cut homebuying taxes, according to Bloomberg. The decision to cut homebuying taxes would come days after the announcement of a $1.4 trillion package to bail out local …

China unveils new ‘hidden debt’ scheme for local governments
1 month, 1 week ago

China unveils new ‘hidden debt’ scheme for local governments

Hindustan Times  

China has unveiled an ambitious plan to relieve public debt, aiming to turn local governments away from belt-tightening practices that have exacerbated a domestic downturn. Policymakers approved a proposal to swap six trillion yuan of hidden debt belonging to local governments for official loans with more favourable terms. Policymakers gathered in Beijing this past week approved a proposal to swap …

How China plans to cut hidden debt in massive shakeup
1 month, 2 weeks ago

How China plans to cut hidden debt in massive shakeup

New Indian Express  

SHANGAI: China has unveiled an ambitious plan to relieve public debt, aiming to turn local governments away from belt-tightening practices that have exacerbated a domestic downturn. Policymakers gathered in Beijing this past week approved a proposal to swap six trillion yuan of hidden debt belonging to local governments for official loans with more favourable terms. Much of local governments' hidden …

China unveils $1.8 tn package to help debt-ridden local governments but falls short of providing strong stimulus
1 month, 2 weeks ago

China unveils $1.8 tn package to help debt-ridden local governments but falls short of providing strong stimulus

Firstpost  

The Chinese authorities noted that the new economic measures could cut the debt of local governments to 2.3 tn yuan by the end of 2028. The fiscal package which is expected to help local governments boost their economies includes raising the debt ceiling by 6tn yuan over three years. The initiative would help the local government to replace their hidden …

China’s 10-year bond yields drop amid $1.4 billion debt refinancing program, more stimulus awaited
1 month, 2 weeks ago

China’s 10-year bond yields drop amid $1.4 billion debt refinancing program, more stimulus awaited

Live Mint  

Yield for China's benchmark 10-year bonds have slid to their lowest in over a month after the government announced its 10 trillion yuan or $1.4 billion worth debt refinancing programme, Bloomberg reported. China's Debt Refinancing Programme — The Details The announcement was made after the National People’s Congress Standing Committee meeting on November 8, to “underwhelmed” reactions, as per the …

To revive sluggish economy, China announces $1.4 tn bailout package for local govts
1 month, 2 weeks ago

To revive sluggish economy, China announces $1.4 tn bailout package for local govts

Firstpost  

As China appears set to miss the 5% annual growth target amid continuing economic woes, the Standing Committee of the National People’s Congress has approved a $1.4 trillion package to refinance the unsustainable debt of local governments In the latest step to revive the sluggish economy, China on Friday announced a $1.4 trillion package. The bailout package, announced by Finance …

China approves $840B plan to refinance local government debt, boost slowing economy
1 month, 2 weeks ago

China approves $840B plan to refinance local government debt, boost slowing economy

Associated Press  

BEIJING — China on Friday approved a 6 trillion yuan plan to help local governments refinance their mountains of debt, in the latest push to rev up growth in the world’s second largest economy. Finance minister Lan Fo’an estimated that the hidden debt of local governments was 14.3 trillion yuan at the end of 2023. Lan said 2 trillion yuan …

China economy: Beijing approves $1.4 trillion debt package in latest measure to boost flagging growth
1 month, 2 weeks ago

China economy: Beijing approves $1.4 trillion debt package in latest measure to boost flagging growth

CNN  

Editor’s Note: Sign up for CNN’s Meanwhile in China newsletter which explores what you need to know about the country’s rise and how it impacts the world. Hong Kong CNN — China has approved a 10 trillion yuan plan to bolster its ailing economy by allowing local governments to refinance their debt, unveiling additional stimulus measures to counter a potentially …

China’s coming stimulus is necessary but likely insufficient
1 month, 2 weeks ago

China’s coming stimulus is necessary but likely insufficient

Live Mint  

Hopes for a massive fiscal stimulus have sent Chinese stocks on a roller-coaster ride in the past month or so. These local governments have racked up piles of debt over the years as they are responsible for the bulk of public spending from infrastructure to education, but lack reliable revenue sources to match. China’s housing market implosion has drastically reduced …

China leverages fiscal toolbox to consolidate economic growth
1 month, 2 weeks ago

China leverages fiscal toolbox to consolidate economic growth

China Daily  

China has appropriately enhanced the intensity of the proactive fiscal policy so far this year, utilizing a combination of policy tools, including ultra-long special treasury bonds and tax and fee reductions to promote its sustained economic recovery. Some 700 billion yuan of funds raised via the ultra-long special treasury bonds have been allocated to support the implementation of major national …

China Residential Property Sales Rebound as Stimulus Boosts Buyer Morale
1 month, 3 weeks ago

China Residential Property Sales Rebound as Stimulus Boosts Buyer Morale

Live Mint  

China's residential property sales rose in October, marking the first on-year increase since 2024. The value of new-home sales increased by 7.1%, reversing a 37.7% slump in September. The improvement was driven by stimulus measures that eased borrowing costs and relaxed buying restrictions in major cities. However, analysts remain concerned about the sector's decline and the need for further policy …

Here’s How Bad China’s Economy Really Is. Can It Be Fixed?
2 months, 1 week ago

Here’s How Bad China’s Economy Really Is. Can It Be Fixed?

Bloomberg  

China’s economic growth target of 5% this year is looking ambitious, given sluggish consumer spending, an uncertain outlook for the country’s exports and a still shaky property market. Fewer than a fifth of economists surveyed by Bloomberg Terminal Bloomberg were predicting gross domestic product would expand by 5% in 2024, as analysts at lenders such as Bank of America Corp. …

China to step up fiscal policy implementation to spur economic recovery: official
4 months, 3 weeks ago

China to step up fiscal policy implementation to spur economic recovery: official

China Daily  

A Chinese clerk counts renminbi yuan banknotes in Nantong, East China's Jiangsu province. The country will issue the ultra-long special treasury bonds in a timely manner and make good use of the funds raised from the bond sales, Lin Zechang, of the Ministry of Finance, told a press conference. Lin said that the country will also speed up the issuance …

Pay down time
6 months, 2 weeks ago

Pay down time

China Daily  

SHI YU/CHINA DAILY The Chinese government still has ample policy space to deal with the country's debt problems The scale of China's debt and its ratio to GDP have increased rapidly over the past decade. After China's industrialization peaked, capital-intensive enterprises no longer borrowed heavily, and local government financing platforms and households became the main sources of new debts. China …

China rolls out new measures to fix its property crisis, spur growth
7 months ago

China rolls out new measures to fix its property crisis, spur growth

Associated Press  

China announced a slate of fresh measures Friday to reinvigorate its ailing property industry after the latest data showed housing prices have slumped nearly 10% since the start of the year. He Lifeng, a vice premier, said officials would roll out policies to suit each city and “fight the tough battle of dealing with the risk of unfinished commercial housing.” …

China weighs more stimulus, considers $139 billion of special bonds: Report
11 months, 1 week ago

China weighs more stimulus, considers $139 billion of special bonds: Report

Live Mint  

China is considering 1 trillion yuan of new debt issuance under a special sovereign bond plan - which will be only the fourth such sale in the past 26 years, according to a Bloomberg report. In that case, Beijing took the unusual step of raising 2023’s fiscal deficit ratio to about 3.8 per cent of gross domestic product — an …

China’s Colossal Hidden-Debt Problem Is Coming to a Head
1 year ago

China’s Colossal Hidden-Debt Problem Is Coming to a Head

Live Mint  

China is trying to defuse a financial time bomb that could severely damage its banking system. In early November, China’s central government said it places “great importance to the prevention and resolution of the risk of hidden debts of local governments." Pan Gongsheng, the governor of the People’s Bank of China, said at a Beijing financial forum last month that …

The $2 trillion interest bill that’s hitting governments
1 year, 1 month ago

The $2 trillion interest bill that’s hitting governments

Live Mint  

The world spent the past decade-plus taking advantage of rock-bottom interest rates to binge on debt. Governments are expected to spend a net $2 trillion paying interest on their debt this year as higher interest rates make borrowing more expensive, up more than 10% from 2022, according to an analysis of International Monetary Fund data by research consulting firm Teal …

PBOC may take steps on local govt debt strain
1 year, 1 month ago

PBOC may take steps on local govt debt strain

China Daily  

China's central bank is likely to provide low-cost funding for commercial banks assisting certain local governments in addressing their debt strain, underlining the country's growing emphasis on defusing local government debt risks, experts said. Their comments echoed the remarks of Pan Gongsheng, governor of the People's Bank of China, who said in a China Central Television interview on Friday that …

China’s government tries to defuse economic fears after real estate developer’s debt struggle
1 year, 4 months ago

China’s government tries to defuse economic fears after real estate developer’s debt struggle

Associated Press  

BEIJING — China’s government is trying to reassure jittery homebuyers after a major real estate developer missed a payment on its multibillion-dollar debt, reviving fears about the industry’s shaky finances and their impact on the struggling Chinese economy. Country Garden’s debt struggle might “drive potential homebuyers away from privately owned developers,” Moody’s Investors Service said in a report. That would …

Why LGFV Debt Is a Growing Risk for China’s Economy
1 year, 6 months ago

Why LGFV Debt Is a Growing Risk for China’s Economy

Bloomberg  

Cracks are showing in a pillar of China’s debt market known as local-government financing vehicles, or LGFVs. With many local authorities facing cash-flow problems due to the country’s real estate crisis, there are growing concerns Bloomberg Terminal about this $9 trillion market — prompting the government to take steps to effectively bail out weaker issuers and avert a credit crunch. …

China to expand fiscal spending to support economic recovery
1 year, 11 months ago

China to expand fiscal spending to support economic recovery

China Daily  

A worker counts Chinese currency renminbi at a bank in Linyi, East China's Shandong province. China will appropriately expand fiscal spending as the government aims to provide "more direct and effective" fiscal support for economic recovery in 2023, according to the Ministry of Finance. "We will appropriately expand fiscal spending by optimizing the tool mix of fiscal deficit, local government …

Xi’s Covid Zero Policy Prolongs Stress in China Real Estate Debt Market
2 years, 7 months ago

Xi’s Covid Zero Policy Prolongs Stress in China Real Estate Debt Market

Bloomberg  

Yields Top 22% as Covid-Zero Policy Stings China Dollar Bonds China Credit Tracker Share this article Fresh challenges are confronting Chinese borrowers in global debt markets after authorities doubled down on the nation’s Covid Zero policy. The focus remains on China’s offshore junk note market—dominated by property developers—after stress levels remained at their most elevated level in April, Bloomberg’s credit …

Experts mull fiscal stimulus withdrawal
3 years, 11 months ago

Experts mull fiscal stimulus withdrawal

China Daily  

A staff member wearing a face mask arranges stacks of Chinese yuan banknotes at a bank in Nantong, East China's Jiangsu province, on Jan 30, 2020. Policy advisers agree on prevention of potential side-effects of tax measures A mechanism to withdraw special fiscal stimulus measures smoothly and gradually in the post-pandemic period is needed to stabilize market expectations and minimize …

China unlikely to dilute fiscal stimulus package
4 years, 1 month ago

China unlikely to dilute fiscal stimulus package

China Daily  

A worker counts Chinese currency renminbi at a bank in Linyi, East China's Shandong province. Policymakers are unlikely to make any changes to China's existing fiscal stimulus package next year, but may focus on additional steps to bolster economic recovery, especially to improve people's livelihood and save jobs, officials from the Ministry of Finance said on Thursday. More funds, especially …

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