BEIJING: China may raise an additional 6 trillion yuan ($850 billion) from special treasury bonds over three years to stimulate a sagging economy, local media reported, a figure that failed to revive sentiment in the country’s stock market.
The Caixin Global report, which cited sources with knowledge of the matter, comes after Finance Minister Lan Foan on Saturday said Beijing will “significantly increase” debt, although the absence of details on the size and timing of the fiscal measures disappointed some investors.
The size of the expected fiscal package has been the subject of intense speculation in financial markets. Chinese shares hit two-year-highs earlier this month on news of the stimulus, before retreating in the absence of official details.
On Tuesday, stocks (SSEC, and CSI300) dipped about 0.3%, suggesting little excitement among investors about the reported amount, although analysts say it would at least stabilise growth in the near-term.
“This is in line with our expectations,” said Xing Zhaopeng, ANZ’s senior China strategist. “For next year, we still think a growth target of around 5% is likely to be maintained. So, for a 5% growth rate, that should be enough.”
Reuters reported last month that China planned to issue special sovereign bonds worth about 2 trillion yuan ($285 billion) this year as part of fresh fiscal stimulus.
Data in recent months, including Monday’s trade and new lending figures for September, missed expectations, raising concern that China may not reach this year’s roughly 5% growth target and will struggle to fend off deflationary pressures.
