Exclusive: China May Add 6 Trillion Yuan in Treasury Bonds to Buttress Economy

By Cheng Siwei, Yu Hairong and Zhang Yukun

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Minister of Finance Lan Foan speaks at a press conference in Beijing on Saturday. Photo: SCIO

China may raise an additional 6 trillion yuan from treasury bonds over three years as part of its efforts to buttress the slowing economy through fiscal stimulus, multiple sources with knowledge of the matter told Caixin.

The funds will be partly used to help local governments resolve their off-the-books debts, according to the sources.

Speculation about the size of China’s new fiscal stimulus has been rife since the Ministry of Finance pledged at a press briefing Saturday to help local governments relieve debt pressure without specifying the amount.

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China plans to raise 6 trillion yuan in special treasury bonds over three years to boost the slowing economy and address local government debts.
Local governments are encouraged to buy land and housing from developers to revive the real estate sector, using funds from special-purpose bonds.
Additional fiscal policies include capital injection into state banks and increased deficit capacity, potentially surpassing 5 trillion yuan in stimulus spending.

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