Chinese Government to Speed Bond Sales to Stimulate Growth
China’s central and local governments will probably raise at least a net 2.2 trillion yuan ($330 billion) in bond sales in the final two months of the year, the second-highest amount on record for the period, as the authorities step up efforts to support growth.
China's central and local governments plan to raise at least 2.2 trillion yuan in bond sales during November and December, according to projections by China Chengxin International Credit Rating and Industrial Securities. This figure would be the second-highest on record for the period, just behind the stimulus surge in 2024. The additional borrowing would provide Beijing with more fiscal resources to support the economy, particularly as challenges such as sluggish consumption, job market issues, and a decline in infrastructure investment persist.
The People's Bank of China will maintain sufficient liquidity to facilitate these bond sales. Analysts note that local government bond issuance in the fourth quarter has surged, and the contraction in infrastructure investment is expected to lessen. The anticipated acceleration in bond sales, along with institutional investments, could lead to temporary liquidity fluctuations in the interbank market. However, the central bank may employ open-market operations to mitigate these effects.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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