China mulls over issuance of RMB 10trn in extra debt

China was said to be considering issuing more than RMB 10.0trn (£1.07trn) in extra debt over the next few years in an effort to revive its fragile economy.

According to Reuters, the Standing Committee of the National People's Congress, China's top legislative body, was looking to approve a fresh fiscal package at an upcoming meeting on 8 November.

The package was said to include RMB 6.0trn (£646.82bn) to be partly raised over three years via special sovereign bonds, including 2024, with the proceeds to primarily be used to help local governments address off-the-books debt risks.

The NPC Standing Committee was also expected to approve as much as RMB 4.0trn (£431.13bn) worth of special-purpose bonds for idle land and property purchases over the next five years.

China's spending plans indicate that Beijing has now switched its focus towards using stimulus to prop up its ailing economy, albeit at a lesser level than it had done so in 2008.

It was also worth noting that the meeting's timing, which coincides with the week of the US presidential vote on 5 November, also offers China greater flexibility to adjust its package based on the election outcome.

Reporting by Iain Gilbert at Sharecast.com