The picture shows the construction site of Shanghai real estate developer Hongkong Land on November 4, 2024.
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BEIJING – China is widely expected to roll out more stimulus measures on Friday when the National People’s Congress concludes a five-day session.
Since late September, authorities have stepped up stimulus efforts, driving stocks higher. President Xi Jinping On September 26, he presided over a meeting and called for Strengthen fiscal and monetary supportand stem the housing market downturn.
Although People’s Bank of China Interest rates have been cut several times, and significant increases in government debt and spending require approval from the National People’s Congress.
The approval is likely to come during a week-long meeting of the Legislature’s Standing Committee. At a similar meeting last October, authorities gave a rare approval to increase China’s deficit from 3% to 3.8%, according to state media reports.
Expectations for the scale of fiscal support added Donald Trump has threatened tough tariffs on Chinese goods after he won the US presidential election this week. But some analysts remain cautious, warning Beijing may remain conservative and not provide direct support to consumers.
When discussing the fiscal support plan at a press conference last month, Finance Minister Lanfuan emphasized the need to Solve the local government debt problem.
exist parliamentary meeting So far, officials have reviewed a plan to raise local government debt limits, according to state media reports. The additional quota will be used to replace the implicit debt of local governments.
Nomura estimates that China has 50 trillion yuan to 60 trillion yuan ($7 trillion to $8.4 trillion) of such hidden debt, and predicts that Beijing may allow local authorities to increase debt issuance by 10 trillion yuan in the next few years.
Nomura Securities said this could save local governments 300 billion yuan in annual interest payments.
In recent years, the downturn in China’s real estate market has severely limited an important source of revenue for local governments. Regional authorities have also had to invest in Covid-19 control during the pandemic.
Even before that, China’s local government debt had Grow to 22% of GDP by the end of 2019According to the International Monetary Fund report, income growth far exceeds that available to service debt.
