China’s Ministry of Finance did not lay out a broad fiscal stimulus package at a press conference on Saturday, but instead announced a stronger plan to address local government debt and the real estate market, two areas of concern weighing on the country’s economic growth. He promised to take action.
However, analysts still expect the ministry to raise the fiscal deficit ratio from the current 3%, increase the issuance of super-long-term special national bonds and local bonds, and implement modest economic stimulus measures such as tax cuts.
During the hour-long meeting, the ministry aimed to support local governments and the financial system, including raising the debt ceiling, raising funds from unused government debt facilities, providing financial support to the real estate market and replenishing capital for major state-owned enterprises. , presented many changes. bank.
Finance Minister Lan Fung said cash-strapped local governments could rely on special bond funds totaling 2.3 trillion yuan ($325.3 billion) in the final three months of this year.
The central government will also introduce a major one-off debt ceiling increase to replace hidden local government debt, which the minister described as “the strongest measure to support debt reduction introduced in recent years”. I called it.
Regarding the real estate sector, Deputy Finance Minister Liao Min said local governments will be allowed to use special bonds to purchase idle land and commercial housing from troubled developers.
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