“China unveiled a 10 trillion yuan ($1.40 trillion) debt package to ease the financial woes of local governments and stabilize weak economic growth.”, — write: www.epravda.com.ua
China unveiled a 10 trillion yuan ($1.40 trillion) debt package to ease the financial woes of local governments and stabilize weak economic growth.
About this informs Reuters.
The measures are said to mark a departure from the all-out stimulus strategies China has used in the past to revive growth. They are aimed at restoring municipal balance sheets as a long-term goal, rather than directly injecting money into the economy.
Replacing hidden debt with official debt is expected to save local governments 600 billion yuan in interest over five years.
In response to the US election and heightened risks to trade, state media reported that the Chinese government on Friday approved expanding export credit insurance coverage and will increase support for trading companies.
Faced with high debt and falling revenues, local governments are cutting civil servant salaries and piling up debt to private sector companies, restricting cash flows to the real economy and increasing deflationary pressures.
Their difficulties, caused by a severe property market crisis from 2021 that has reduced revenue for developers from auctioning land for residential development – a key source of funding for cities and provinces – have threatened China’s 2024 growth target of around 5% .
We will remind:
Chinese exports in October increased at the fastest pace in two years as factories rushed to move inventories to key markets in anticipation of further tariffs from the United States and the European Union.