China revealed on Friday its plan to allocate an additional 6 trillion yuan ($840 billion) from the central government to local authorities to address hidden debt concerns.
The initiative, implemented this year and continuing until 2026, will distribute around 2 trillion yuan annually.
China’s Minister of Finance Lan Fo’an disclosed that starting this year, the central government intends to issue 800 billion yuan per year in local government special bonds for a five-year period, totaling 4 trillion yuan.
These measures are projected to reduce hidden debt from 14.3 trillion yuan to 2.3 trillion yuan by 2028, Lan highlighted.
In addition, authorities have announced that local governments will have access to an additional 4 trillion yuan in new special local bond quotas over a period of five years for similar objectives.
