China approves $840B plan to refinance local government debt, boost slowing economy
China has announced a 6 trillion yuan ($839 billion) plan to help local governments refinance their mountains of debt in the latest push to rev up growth in the world's second largest economy
BEIJING (AP) — China on Friday approved a 6 trillion yuan ($839 billion) plan to help local governments refinance their mountains of debt, in the latest push to rev up growth in the world’s second largest economy.
The plan will be implemented over the next three years, Xu Hongcai, vice-chairman of the National People's Congress's financial and economic committee, said at a news conference Friday.
Finance minister Lan Fo'an estimated that the hidden debt of local governments was 14.3 trillion yuan ($2 trillion) at the end of 2023. Hidden debt refers to debt that has not been disclosed publicly.
Lan said 2 trillion yuan would be allocated each year from 2024 to 2026 to help local governments resolve their debts. He estimated that the amount of hidden debt will drop to 2.3 trillion yuan ($320.9 billion) by the end of 2028.
