China kicked off a fresh round of fiscal support on Friday for its sputtering economy with a package that eases debt repayment strains for local governments, with Finance Minister Lan Foan signalling further stimulus in the pipeline.

The world's second-largest economy has sputtered over the past year, facing strong deflationary pressures amid weak demand, a property crisis and mounting financing strains on local governments, with the outlook further clouded by the US election win by Donald Trump, who has threatened tariffs in excess of 60 per cent on all Chinese goods.

Beijing will let local governments allocate 10 trillion yuan ($1.40 trillion) towards reducing off-balance sheet, or "hidden" debts, officials said on Friday after a week-long parliament meeting, without disclosing any steps to boost sluggish consumer demand as many investor had hoped for.

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Local governments' debt quota will be raised by 6 trillion yuan and they would be able to use another 4 trillion yuan in issuance that has already been approved to finance the debt swaps, aimed at reducing systemic financial risks,

China's top legislative body, the standing committee of the National People's Congress (NPC), approved a bill raising the ceiling for local governments to issue special bonds to 35.52 trillion yuan from 29.52 trillion.

"I don't see anything that exceeds expectations," said Huang Xuefeng, research director at Shanghai Anfang Private Fund Co, in Shanghai.

"It's not huge if you look at the fiscal shortfalls due to the economic slowdown and land sales slump. The money is used to replace hidden debts, which means it doesn't create new work flows, so the support to GDP growth is not that direct."

The debt swaps, flagged in a Reuters report last week, aim to resolve local debt risks, Xu Hongcai, the vice chairman of the financial and economic affairs committee of the NPC, told a press conference in Beijing.

Finance Minister Lan, sitting next to Xu, said authorities will issue policies to support state sector purchases of unsold apartments and reclaim undeveloped residential land from property developers, as well as replenish the capital of big state banks.

Lan did not give details on the size or timing of those measures.

Larger-than-expected monetary stimulus in September fuelled unfettered investor speculation about a complementing, blockbuster fiscal programme to immediately boost activity, sending China shares sharply higher.

Debt swaps aim to repair damaged balance sheets and act as a growth stabiliser, rather than a potent growth stimulant.

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China is struggling to tackle the side effects from a mountain of debt left from previous stimulus since the global crisis of 2008 and 2009.

This includes hidden debt mainly racked up by local government financing vehicles (LGFVs), raised for infrastructure projects authorities deemed critical for development.

That debt overhang leaves them little room to fund new projects to boost ailing economic activity, however.

Lan said "hidden debt" of local governments stood at 14.3 trillion yuan at the end of 2023, which authorities planned to trim to 2.3 trillion yuan by 2028.

The International Monetary Fund estimates debts of LGVFs amounted to 60 trillion yuan at the end of 2023, or 47.6 per cent&nbsp;of GDP.

The debt swaps were expected to save 600 billion yuan in interest for local governments over five years.

LGFVs' debt pile - including loans, bonds and shadow credits - are seen as a growing source of systemic risk in China's financial system, especially in a shaky economy.

Central and local government debt totalled 147 trillion yuan at the end of 2023, or 117 per cent&nbsp;of GDP, according to the IMF.

Disclaimer: This story has been published from a news agency feed with minimal edits to adhere to WION's style guide. The headline may have been changed to better reflect the content of the story or to make it more suitable for WION audience.

China kicked off a fresh round of fiscal support on Friday for its sputtering economy with a package that eases debt repayment strains for local governments, with Finance Minister Lan Foan signalling further stimulus in the pipeline.

China kicked off a fresh round of fiscal support on Friday for its sputtering economy with a package that eases debt repayment strains for local governments, with Finance Minister Lan Foan signalling further stimulus in the pipeline. The world's second-largest economy has sputtered over the past year, facing strong deflationary pressures amid weak demand, a property crisis and mounting financing strains on local governments, with the outlook further clouded by the US election win by Donald Trump, who has threatened tariffs in excess of 60 per cent on all Chinese goods. Beijing will let local governments allocate 10 trillion yuan ($1.40 trillion) towards reducing off-balance sheet, or "hidden" debts, officials said on Friday after a week-long parliament meeting, without disclosing any steps to boost sluggish consumer demand as many investor had hoped for. Also read: Nvidia surpasses $3.6 trillion market value after Trump election victory Local governments' debt quota will be raised by 6 trillion yuan and they would be able to use another 4 trillion yuan in issuance that has already been approved to finance the debt swaps, aimed at reducing systemic financial risks, China's top legislative body, the standing committee of the National People's Congress (NPC), approved a bill raising the ceiling for local governments to issue special bonds to 35.52 trillion yuan from 29.52 trillion. "I don't see anything that exceeds expectations," said Huang Xuefeng, research director at Shanghai Anfang Private Fund Co, in Shanghai. "It's not huge if you look at the fiscal shortfalls due to the economic slowdown and land sales slump. The money is used to replace hidden debts, which means it doesn't create new work flows, so the support to GDP growth is not that direct." The debt swaps, flagged in a Reuters report last week, aim to resolve local debt risks, Xu Hongcai, the vice chairman of the financial and economic affairs committee of the NPC, told a press conference in Beijing. Finance Minister Lan, sitting next to Xu, said authorities will issue policies to support state sector purchases of unsold apartments and reclaim undeveloped residential land from property developers, as well as replenish the capital of big state banks. Lan did not give details on the size or timing of those measures. Larger-than-expected monetary stimulus in September fuelled unfettered investor speculation about a complementing, blockbuster fiscal programme to immediately boost activity, sending China shares sharply higher. Debt swaps aim to repair damaged balance sheets and act as a growth stabiliser, rather than a potent growth stimulant. Also read: How Samsung lagged in the AI race, resulting in a $126 billion loss China is struggling to tackle the side effects from a mountain of debt left from previous stimulus since the global crisis of 2008 and 2009. This includes hidden debt mainly racked up by local government financing vehicles (LGFVs), raised for infrastructure projects authorities deemed critical for development. That debt overhang leaves them little room to fund new projects to boost ailing economic activity, however. Lan said "hidden debt" of local governments stood at 14.3 trillion yuan at the end of 2023, which authorities planned to trim to 2.3 trillion yuan by 2028. The International Monetary Fund estimates debts of LGVFs amounted to 60 trillion yuan at the end of 2023, or 47.6 per cent of GDP. The debt swaps were expected to save 600 billion yuan in interest for local governments over five years. LGFVs' debt pile - including loans, bonds and shadow credits - are seen as a growing source of systemic risk in China's financial system, especially in a shaky economy. Central and local government debt totalled 147 trillion yuan at the end of 2023, or 117 per cent of GDP, according to the IMF. Disclaimer: This story has been published from a news agency feed with minimal edits to adhere to WION's style guide. The headline may have been changed to better reflect the content of the story or to make it more suitable for WION audience.

China unveils $1.4 trillion debt relief package to revive its economy

China and Britain have vowed to continue and strengthen cooperation on a wide range of economic, financial and trade issues, including speeding the introduction of a London-Shanghai stock connect programme.

In a joint statement on Saturday, coinciding with an official visit to China by British finance minister Philip Hammond, the countries also said they opposed trade protectionism and reaffirmed their support for the World Trade Organisation as a key pillar of the global trade system.

The statement comes as China, in an unusual step, accused the United States and the European Union of breaking promises that they made when China joined the WTO.&nbsp;Speaking at a press conference in Beijing together with Chinese Vice Premier Ma Kai, Hammond said the two countries were also discussing a long-awaited London-Shanghai stock connect programme, as well as a possible scheme to connect their bond markets.

&quot;We have agreed to accelerate the final preparations for the London-Shanghai stock connect initiative and we&#39;ve agreed to commence feasibility studies for a UK-China bond connect and for mutual recognition of funds between the two jurisdictions&quot;, he said.&nbsp;

Other areas of cooperation highlighted in the joint statement include encouraging each country&#39;s banks to increase their presence and activity in the other country, the promotion of China-UK&nbsp;cross-border yuan business, and support of the yuan as a settlement currency.&nbsp;China and the UK&nbsp;will establish a new joint expert group to exchange views on macroeconomic and fiscal policy, the joint statement said.

Former British prime minister David Cameron will also be involved in a proposed $1 billion bilateral investment fund, the statement added.

Slow progress

Talks on the Shanghai-London stock connect scheme, which would allow investors on one bourse to invest in the other, started two years ago, but progress has been slow partly due to Britain&#39;s unexpected decision to leave the European Union.&nbsp;

Closer ties between China and UK&#39;s capital markets would be welcome by London, whose future as a global financial hub is clouded by Brexit. It would also be a boon to the London Stock Exchange Group, which is grappling with the turmoil that saw the departure of chief executive Xavier Rolet recently.

For China, connecting London and Shanghai&#39;s exchanges would mark another milestone in its capital markets deregulation. Beijing&#39;s commitments to financial reform have won global recognition as US&nbsp;index publisher MSCI has agreed to include China A-shares into its global indexes next year.&nbsp;

The London-Shanghai stock connect is modelled after a similar scheme that links Hong Kong and Shanghai, but unlike the Shanghai-Hong Kong stock connect, it faces more technical and regulatory challenges as Chinese and British investors trade in different time zones.

Closer ties between China and UK's capital markets would be welcome by London, whose future as a global financial hub is clouded by Brexit

China and Britain have vowed to continue and strengthen cooperation on a wide range of economic, financial and trade issues, including speeding the introduction of a London-Shanghai stock connect programme. In a joint statement on Saturday, coinciding with an official visit to China by British finance minister Philip Hammond, the countries also said they opposed trade protectionism and reaffirmed their support for the World Trade Organisation as a key pillar of the global trade system. The statement comes as China, in an unusual step, accused the United States and the European Union of breaking promises that they made when China joined the WTO. Speaking at a press conference in Beijing together with Chinese Vice Premier Ma Kai, Hammond said the two countries were also discussing a long-awaited London-Shanghai stock connect programme, as well as a possible scheme to connect their bond markets. "We have agreed to accelerate the final preparations for the London-Shanghai stock connect initiative and we've agreed to commence feasibility studies for a UK-China bond connect and for mutual recognition of funds between the two jurisdictions", he said. Other areas of cooperation highlighted in the joint statement include encouraging each country's banks to increase their presence and activity in the other country, the promotion of China-UK cross-border yuan business, and support of the yuan as a settlement currency. China and the UK will establish a new joint expert group to exchange views on macroeconomic and fiscal policy, the joint statement said. Former British prime minister David Cameron will also be involved in a proposed $1 billion bilateral investment fund, the statement added. Slow progress Talks on the Shanghai-London stock connect scheme, which would allow investors on one bourse to invest in the other, started two years ago, but progress has been slow partly due to Britain's unexpected decision to leave the European Union. Closer ties between China and UK's capital markets would be welcome by London, whose future as a global financial hub is clouded by Brexit. It would also be a boon to the London Stock Exchange Group, which is grappling with the turmoil that saw the departure of chief executive Xavier Rolet recently. For China, connecting London and Shanghai's exchanges would mark another milestone in its capital markets deregulation. Beijing's commitments to financial reform have won global recognition as US index publisher MSCI has agreed to include China A-shares into its global indexes next year. The London-Shanghai stock connect is modelled after a similar scheme that links Hong Kong and Shanghai, but unlike the Shanghai-Hong Kong stock connect, it faces more technical and regulatory challenges as Chinese and British investors trade in different time zones.

China, UK vow to strengthen economic, financial cooperation

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China unveils $1.4 trillion debt relief package to revive its economy

China, UK vow to strengthen economic, financial cooperation