The Chinese government will pour 20 trillion crowns into the system to stabilize it.
China will allow local governments to issue bonds worth up to six trillion yuan (almost CZK 20 trillion) over the next three years to get rid of hidden debts accumulated in the past. This is a key step in an effort to reduce systemic risk and generally support the economy, Reuters reported today. There has been a lot of speculation on the financial markets in recent days about the upcoming support measures.
The proposal to raise the debt ceiling for local governments was approved by the Standing Committee of the National People’s Congress, the country’s top legislative body. It was in session from Monday to today.
China has set itself the goal of achieving five percent growth in gross domestic product (GDP) this year. Statistics for the third quarter, however, showed that the year-on-year growth rate of GDP continued to slow down to 4.6 percent. According to many analysts, the economy will not reach five percent growth this year.
The country continues to struggle with the crisis in the real estate market. China’s central bank said today that the volume of outstanding loans granted to finance the purchase of real estate at the end of the third quarter was 52.9 trillion yuan (almost CZK 173 trillion). Year-on-year, this means a decrease of one percent. The volume of outstanding individual mortgages then decreased by 2.3 percent to 37.56 trillion yuan (CZK 122.8 trillion).
Source: zpravy.tiscali.cz
