: China rolls out a further trillion yuan in economic stimulus after vowing it wouldn’t unleash big fiscal packages

by | Aug 25, 2022 | Stock Market

Just a day after China’s central bank reiterated that it was sticking to its policy of limited stimulus measures, policy makers surprised observers Wednesday by announcing a packet of 1 trillion yuan — the equivalent of $146 billion — in pro-growth measures. Despite ongoing troubles in the world’s second largest economy, Beijing this year has only implemented occasional sprinklings of policies aimed at kickstarting a recovery after its strict COVID lockdowns and long-running property crisis slowed growth to a crawl.

The new initiative, issued by the State Council — China’s cabinet — centers around 19 measures that emerged from a meeting late Wednesday chaired by Premier Li Keqiang. They span a range of targets the government deems to be in need of support. Among the allowances, state policy banks were given an additional 300 billion yuan ($44 billion) focused mainly on financing infrastructure projects. Tight rules were announced alongside the measures that require the projects to be profit-making and targeted. Local governments were given the green light to use more than 500 billion yuan ($73 billion) of existing special bond quotas and were promised reduced financing costs through interest-rate changes. Amid an energy crisis sparked by severe droughts and heat waves, the cabinet said central-government-run electricity firms will be allowed to sell 200 billion yuan ($29 billion) in special debt to ensure adequate energy supply. Local governments were also told they have been granted increased flexibility to stimulate the housing market, depending on their localities’ specific level of need. The backdrop: China’s r …

Article Attribution | Read More at Article Source

Share This