By South China Morning Post | Created at 2024-09-27 02:02:40 | Updated at 2024-09-30 13:37:00
3 days ago
Expectations are high that China would follow this week’s wide-ranging stimulus package by selling at least 1 trillion yuan (US$142 billion) of special treasury bonds and by lifting its budget deficit ratio, possibly in the next two to four weeks, analysts said.
Tuesday’s raft of interest rate cuts and monetary policy easing were seen as part of stimulus efforts to help meet China’s “around 5 per cent” economic growth target.
The moves were followed up on Thursday as China’s leaders stressed the need to strengthen “countercyclical” adjustments of fiscal and monetary policy, according to a readout from a Politburo meeting chaired by President Xi Jinping.
Necessary fiscal spending should be guaranteed, added the readout, which said that China would make good use of its ultra-long special treasury bonds and local government special bonds to support investment.
And analysts believe China would need more fiscal power, given it is highly likely to suffer from a shortfall in its budget this year, with a property market crisis and local government debt woes having taken a toll on finances across many regions.
