China is gearing up to tackle its local government debt like a pro! 🏆 Last Friday, Premier Li Qiang led a State Council meeting focusing on beefing up measures to mitigate these risks. The goal? Strong policy support and smart debt management strategies that align with the country's high-quality development goals.
According to the Ministry of Finance, by the end of 2023, China's local government debt stood at a whopping 40.74 trillion yuan ($5.82 trillion). Sounds huge, right? But here's the catch: it's all within the limits approved by the National People's Congress. This means the debt risks are manageable and under control. 🙌
The Economic Daily published a commentary highlighting that most of China's government debt is domestic. With the country's stable economy and society, plus strict regulation on new debt and a gradual reduction of existing debt, China can effectively and systematically reduce leverage, the commentary said.
Throwback to July last year, the Political Bureau of the Communist Party of China Central Committee kicked off a comprehensive debt resolution strategy. This led over 20 provinces to issue around 1.4 trillion yuan in special refinancing bonds to ease repayment pressures and cut down interest burdens. 💰
Backing this up, the People's Bank of China teamed up with financial institutions to restructure existing debts. They did this through cool moves like debt rollovers and offering new loans to replace old ones.
Luo Zhiheng, chief economist at Yuekai Securities, shared some wisdom: effective debt management isn't just about shrinking debt size. \"With careful and efficient use, increasing debt can actually boost economic and social development,\" he said.
\"If the economy grows faster than the debt, debt risks decrease amidst high-quality development,\" Luo told China Business Network.
So, China's got a plan, and they're working it! Let's see how this financial play unfolds. 🎬
Reference(s):
cgtn.com
