China to ‘Significantly’ Increase Government Spending, Aiming for Economic Growth Revival

Friday, 11 October 2024, 16:44

China is set to ‘significantly increase’ government spending to revive its struggling economic growth. This move includes issuing more debt for subsidies, supporting the property market, and bolstering state banks. As concerns about meeting growth targets rise, analysts anticipate further fiscal measures.
Cnn
China to ‘Significantly’ Increase Government Spending, Aiming for Economic Growth Revival

China's Fiscal Stimulus Plans

Finance Minister Lan Foan announced efforts to boost economic growth through increased government spending. The strategy includes issuing special sovereign bonds worth about 2 trillion yuan ($284.43 billion) this year. These funds will primarily assist local governments with debt challenges.

Additional Support for Property Market

China is facing strong deflationary pressures largely due to a downturn in the property market. To combat this, the government will subsidize purchases of essential goods. Moreover, families with two or more children will receive a monthly allowance to support consumer spending.

Injecting Capital into State Banks

To enhance liquidity, the government is also considering injecting capital of up to 1 trillion yuan ($142 billion) into leading state banks. This measure aims to increase support for the struggling economy.

Market Reactions and Economic Challenges

The central bank has initiated aggressive monetary support since the Covid-19 pandemic, yet many believe structural issues need addressing. Despite investments, local governments are burdened with $13 trillion in debt, and household spending remains underwhelming.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


Related posts


Newsletter

Get the most reliable and up-to-date financial news with our curated selections. Subscribe to our newsletter for convenient access and enhance your analytical work effortlessly.

Subscribe