BEIJING: China is set to expedite the issuance and utilization of government bonds, as reported by the state-run news agency Xinhua on Sunday, citing an interview with the new finance minister, Lan Foan.
The finance ministry, under Lan's leadership, will steadfastly work on resolving local government debt risks and intensify efforts to harness the potential of special bonds in stimulating economic growth, as per Xinhua's report quoting Minister Foan.
Lan emphasized, "The Ministry of Finance will continue to implement a proactive fiscal policy, focusing on enhancing efficiency and maximizing the impact of fiscal policies." He also acknowledged the challenges posed by the "complex domestic and international situation." To ensure local financing needs are met reasonably, certain new local government debt quotas for 2024 have been issued ahead of time, noted Lan.
Lan, a 61-year-old technocrat with limited central government experience, assumed the role of finance minister, according to state media last month. His appointment coincides with the government's intensified fiscal stimulus measures to revive the world's second-largest economy. He succeeded Liu Kun, who had held the position since 2018. Prior to this role, Lan served as the party chief of the northern province of Shanxi.
His appointment aligns with the central government's approach, which relies heavily on debt and state spending for economic revitalization. However, analysts have pointed out the need for more comprehensive reform.
In its latest move, the top parliamentary body approved the issuance of 1 trillion yuan ($137 billion) in sovereign bonds in the fourth quarter to fund the rebuilding of areas affected by floods, as reported by state media.
The economy surpassed analyst estimates in the third quarter, increasing the likelihood of the government meeting its full-year growth target of around 5%. Nevertheless, challenges persist as the property crisis deepens, and private businesses remain hesitant to invest due to weakened confidence.
As part of broader financial policy adjustments, the ruling Communist Party plans to enhance its control over China's $61 trillion finance industry and reinforce measures to mitigate local debt risks, according to state media. This decision was reported following a biennial financial policy meeting held on October 30-31.__Reuters
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