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China will issue 2.300 trillion yuan (about $325 billion) of new special bonds over the next three months to revive its struggling economy, the finance minister said on Monday. Lan Fo’an, at a press conference in Beijing. “In the next three months, a total of 2,3 trillion yuan of special bond funds can be arranged for use in various places,” Lan said, noting that China still has room “to issue debt and increase the deficit” to finance the new measures, and that the Beijing government is “accelerating the use of additional Treasury bonds, and very long-term special Treasury bonds have also been issued.” In addition, the government also plans to “issue special government bonds to support large state-owned commercial banks,” Lan said, without specifying the amount. Chinese authorities have been working to reverse the trend of slowing growth and reach a 5 percent growth target this year, far from the double-digit expansion that has supported the Asian giant for years.
The announcement is part of a push to strengthen the banking system, shore up the real estate market and ease local government debt in one of the largest stimulus packages in recent years. The plan, which follows a series of measures launched in recent weeks, including interest rate cuts and liquidity for banks, is part of a series of actions by Beijing to end the multi-year housing crisis and chronically low consumption that have plagued the world’s second-largest economy. Beijing’s planned special bonds are aimed in particular at increasing the capital available to banks, as part of a drive to get them to lend in the hope of reviving sluggish consumer spending. China is also preparing to allow local governments to borrow more to finance the acquisition of unused land for development, aiming to lift the real estate market out of a prolonged slump.
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© Agenzia Nova – Reproduction reserved