China wants to take on significantly more debt to get the economy going. Finance Minister Lan Fo’an has announced a series of measures, although without giving any specific figures.
The Chinese leadership wants to issue special government bonds to help large state-owned commercial banks replenish their capital. The banks should be able to better cushion risks and grant more loans. The struggling real estate market should also be supported, as should the heavily indebted local governments. Finance Minister Lan Fo’an also promised tax reform.
Aftermath of the corona pandemic
China’s economy has not recovered as expected since the end of the corona pandemic. In addition to the construction and real estate industry, which previously accounted for around a third of gross domestic product, falling prices, weak domestic consumption and the weakening global economy are putting a strain on the economy. Many young people in particular are unemployed.
While the state and party leadership kept quiet about the problems for a long time, they now admit that the economy is in crisis. In recent weeks, several government agencies have announced economic stimulus measures.
The government still expects economic growth
Despite the obvious problems, the communist leadership still expects economic growth of around five percent for the year as a whole. International economists consider the target to be ambitious despite the economic stimulus measures. You have long been calling for fundamental structural reforms.
