China Approves $1.4 Trillion Plan to Address Local Government Debt

The initiative aims to tackle hidden debts and stabilize the economy amid looming trade tensions with the U.S.

China's National People's Congress has approved a 10 trillion yuan ($1.4 trillion) fiscal package to help local governments manage hidden debts over the next five years.
The plan includes issuing 6 trillion yuan in new bonds over three years and 4 trillion yuan in special bonds over five years to replace high-interest hidden debts.
Finance Minister Lan Fo'an stated that the measures are intended to reduce local government hidden debt from 14.3 trillion yuan to 2.3 trillion yuan by 2028.
The initiative comes as China's economy faces challenges from a slowing property market, weak consumer demand, and the potential for increased tariffs from the U.S. under Donald Trump.
While the package is significant, analysts express disappointment over the lack of direct measures to stimulate consumer spending and address broader economic issues.