Finance officials have announced plans to release a new package of targeted fiscal policies soon, following recent initiatives aimed at providing greater support for the economy. These steps have raised optimism about the outlook for the world’s second-largest economy.
At a press conference in Beijing on Saturday, Finance Minister Lan Fo'an revealed that the new package will focus on stabilizing growth, expanding domestic demand, and mitigating risks. This will be in addition to speeding up the rollout of existing policies.
The new measures will target four main areas: addressing local government debt risks, expanding special treasury bonds to support commercial banks, and deploying various tools to stabilize the real estate market.
One major focus will be on helping local governments manage debt. The debt quota will be increased significantly to address hidden risks, enabling local governments to devote more resources to development and public welfare, Lan explained.
"This upcoming policy represents the most significant effort in recent years to address debt challenges. It's a timely move that will ease the burden on local governments, allowing them to focus more on economic growth and boosting business confidence," Lan said.
While the exact size of the fiscal stimulus has garnered attention, Lan noted that details will be released after the necessary legal procedures are completed.
He also highlighted that local government debt risks have been reduced overall, with phased progress made in debt reduction. In 2023, the local government debt ceiling was set at over 2.2 trillion yuan, with an additional 1.2 trillion yuan allocated for 2024 to help high-risk areas manage existing debt and other challenges.
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