Hong Kong
CNN
—
China has approved a six trillion yuan ($837 billion) plan to bolster its ailing economy by allowing local governments to swap out their hidden debt, unveiling additional stimulus measures to counter a potentially volatile growth path marked by the impending return of Donald Trump to the White House.
The announcement was made on Friday at the conclusion of a five-day meeting by China’s top legislative body, the Standing Committee of the National People’s Congress.
Finance Minster Lan Fo’an told a press conference the six trillion yuan debt limit would be made available over three years to help regional governments replace their so-called “hidden debt.” This kind of debt is normally owed by risky local government financing platforms that are backed by cities or provinces.
Years of strict pandemic controls and a real estate crisis have drained local government coffers in China, leaving authorities across the country struggling with mountains of debt. The problem has gotten so extreme that some cities are now unable to provide basic services, and the risk of default is rising.
This is a developing story and will be updated.