BEIJING: As part of one of its largest support packages in years, China announced on Saturday that it would issue special bonds to assist its sputtering economy, indicating a spending spree to strengthen banks, stabilize the property market, and reduce local government debt.
The plan is one of a series Beijing is taking to end the years-long crisis in the property sector and the world’s second-largest economy’s chronically low consumption.
As part of a push to encourage banks to lend, Beijing’s planned special bonds aim to increase the capital available to them in the hopes of reviving sluggish consumer spending.
China is likewise getting ready to permit nearby states to get more to subsidize the obtaining of unused land for improvement, pointed toward pulling the property market out of a drawn out droop.
Following a series of initiatives initiated in recent weeks that have included interest rate cuts and bank liquidity, Finance Minister Lan Fo’an and other officials did not provide any figures regarding the planned special bonds.
Be that as it may, Lan said China actually has space “to give obligations and increment the deficiency” to support the new measures.
Officials have struggled to reverse China’s slowdown and achieve a growth target of 5% this year, which would be enviable for many Western nations but a far cry from the Asian giant’s previous double-digit expansion.
Beijing was said to be “accelerating the use of additional treasury bonds, and ultra-long-term special treasury bonds are also being issued for use” on Saturday, according to Lan.
He went on to say that “a total of 2.3 trillion yuan of special bond funds can be arranged for use in various places” over the course of the next three months.
Lan stated that Beijing also intends to “issue special government bonds to support large state-owned commercial banks,” but did not specify how much.
The Chinese government has been urging commercial banks to lend more money and to lower mortgage rates, both of which would increase consumer spending power.
