Chinese Finance Minister Lan Fo’an has announced the issuance of special government bonds to boost the country’s flagging economy. Beijing will issue “special government bonds” “to help major state-owned commercial banks replenish their core capital, improve their risk resilience and lending ability, and better promote the development of the real economy,” Lan Fo’an said at a press conference on Saturday Excitement was expected.
Beijing had already announced extensive economic stimulus measures last month, including interest rate cuts on existing real estate loans and relaxed rules for buying houses – China’s real estate sector in particular is in crisis. In addition, the country has high youth unemployment and weak domestic consumption.
Beijing will issue special bonds worth the equivalent of almost 300 billion euros in the next three months, Lan said. He also announced that the debt ceiling for local governments would be raised. “We will increase support for municipalities in dealing with sovereign debt risks, increase debt limits to a greater extent and support municipalities in dealing with hidden debts,” the minister said.
