China allocates 550b yuan in unused debt quotas to boost economy
China allocated 550 billion yuan in unused government debt quotas to support local finances and infrastructure, aiming to meet its 4.5-5 per cent growth target amid weak consumption and a property downturn.
China allocated 550 billion yuan (HK$598 billion) in unused government debt quotas on Friday to support local government finances and expand infrastructure investment, as it boosts support for an economy battling weak consumption and investment.
The step followed a run of soft economic readings that piled pressure on efforts to attain this year's growth target of 4.5 per cent to 5 per cent. Momentum has faltered after the first quarter as tepid domestic demand and a prolonged property downturn offset a boom in high-tech sectors and goods exports.
Of Friday's debt quota, 300 billion yuan is earmarked for supporting the daily operations of county-level and district-level governments, the finance ministry said in a statement. The rest of the proceeds will fund infrastructure projects, especially those being built, and in economically stronger regions.
China's State Council, or cabinet, pledged last month to step up counter-cyclical policy support to tackle rising economic strain and achieve this year's economic and social development targets. Policymakers had similarly tapped unused government debt quotas as a year-end fiscal push in the past two years, but this year's figure exceeds those of 2024 and 2025.
In another statement, the finance ministry vowed to "vigorously and effectively" implement a more proactive fiscal policy and support expansion of domestic demand.