China pledged fiscal support for its debt-saddled local governments, but analysts said the stimulus may not be enough to shift forecasts for growth in the world’s second-biggest economy.
The finance ministry indicated it would expand central government bond issuance and bolster transfers to provincial authorities, though it was unclear if the overall scale of the fiscal effort would be markedly different from one undertaken in 2025.
China’s provinces are grappling with mountains of debt driven in part by huge overinvestment in infrastructure and a massive expansion of spending during the pandemic.
The latest measures will “partially alleviate local fiscal pressures, but are insufficient to fully reverse local government austerity,” analysts at the research firm Trivium wrote.