China’s central government announced a new fiscal stimulus package worth 6 trillion yuan ($840 billion) to ease local governments’ hidden debt burdens. This expansive financial program, set to be implemented by the end of 2026, marks a significant move by Beijing to address mounting economic pressures and revive growth amid global uncertainties.
The new stimulus plan, confirmed by China’s Minister of Finance Lan Fo’an, will allocate around 2 trillion yuan annually to local authorities, CNBC reports.
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Additionally, central authorities will issue 800 billion yuan annually in special local government bonds, totaling 4 trillion yuan over the next five years. These measures are part of a broader strategy to reduce local hidden debt from 14.3 trillion yuan to 2.3 trillion yuan by 2028.
China aims to counter potential “Trump shocks” on trade with its latest fiscal move.
After Trump’s victory, Chinese stocks declined while U.S. markets surged. During his campaign, Trump suggested boosting tariffs on Chinese imports by up to 60%. Such hikes might slash Chinese exports to the U.S. by around $200 billion and cut one percentage point from China’s GDP, according to former economic planning official Zhu Baoliang, cited by CNBC.
Price Actions: At the last check on Friday, BABA stock is down 3.28% at $96.86 premarket. JD is down 3.44%, BIDU is down 2.20%, NIO is down 2.26%, LI is down 4.96%, and XPEV is down 2.74%.
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