Politburo Promises New Measures to Tackle Local Debt Risks and Clear Economic Hurdles

00:00

00:00/00:00

Listen to this article 1x

The real estate sector remains a focal point of a Politburo meeting on July 30, 2024.

China’s leaders are to roll out a batch of new measures at an appropriate time to step up support for the economy it was decided at a Tuesday meeting of the Politburo, the 24-member decision-making body led by President Xi Jinping.

The meeting called for more powerful macro policies to create favorable conditions and a suit of measures to address the debt risks faced by local government financing vehicles (LGFVs).

You've accessed an article available only to subscribers

Subscribe today for just $.99.

VIEW OPTIONS

Download our app to receive breaking news alerts and read the news on the go.

Get our weekly free Must-Read newsletter.

Share this article

Open WeChat and scan the QR code

DIGEST HUB

Digest Hub

Back

Explore the story in 30 seconds

China’s Politburo plans new measures to boost the economy, focusing on macro policies and addressing local government financing vehicle (LGFV) debt risks.
Economic challenges include insufficient demand, external tariffs, and uncertainties from the U.S. presidential election, despite a 4.7% GDP growth in Q2.
The meeting emphasized implementing existing policies and new initiatives, such as ultra-long-term special bonds and measures to boost domestic consumption.

AI generated, for reference only

Who’s Who

Ping An Securities: Ping An Securities is mentioned in the article through its chief analyst, Liu Lu, who commented on the cautious tone of China’s economic performance compared to the April Politburo meeting. Liu noted that more rate cuts are expected in the second half of the year following recent interest rate cuts and other measures implemented since the April meeting.

Zhongtai Securities: Zhongtai Securities provided statistics indicating that, by July 26, approximately 2.1 trillion yuan out of the 3.8 trillion yuan ($524 billion) new local government special bond quota for 2024 has yet to be issued.

GF Securities: GF Securities, represented by chief macro economist Guo Lei, highlighted issues in China's traditional and emerging industries, such as insufficient demand and rapidly increasing production capacity, respectively. Guo emphasized the need to avoid internal competition and eliminate inefficient capacities.

AI generated, for reference only

What Happened When

April 2024：: China held a Politburo meeting that directed avoidance of abrupt policy shifts.

May 2024：: China accelerated the implementation of initiatives such as the issuance of ultra-long-term special government bonds.

Before July 26, 2024：: Of the 3.8 trillion yuan in new local government special bond quota for 2024, about 2.1 trillion yuan had yet to be issued.

July 25, 2024：: The National Development and Reform Commission and the Ministry of Finance issued guidelines to allocate 300 billion yuan of funds through the sale of ultra-long-term special bonds.

July 26, 2024：: China's Politburo held a meeting to discuss new measures to support the economy, including powerful macro policies and a suite of measures to address debt risks faced by local government financing vehicles (LGFVs).

AI generated, for reference only