The picture shows a construction site of Shanghai real estate developer Hongkong Land on November 4, 2024.
Featured China | Future Publishing | Getty Images
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 rare approval to increase China’s deficit from 3% to 3.8%, state media reported.
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 increase local government debt limits, state media reported. 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 add 10 trillion yuan of debt in the coming years. circulation.
Nomura Securities said this could save local governments 300 billion yuan in interest payments each year.
The downturn in China’s real estate market in recent years 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 to grow to 22% of GDP by the end of 2019According to a report by the International Monetary Fund, growth far exceeds the revenue available to service debt.
