
China to Accelerate Issuance of Government Bonds, Says Finance Minister
BEIJING, China – China is set to expedite the issuance and utilization of government bonds, according to a report from state-run news agency Xinhua based on an interview with the new finance minister, Lan Foan.
Lan emphasized that the finance ministry will work steadily to address local government debt risks while enhancing the effectiveness of special bonds to stimulate the economy. He stated, "The Ministry of Finance will continue to implement a proactive fiscal policy, focusing on improving efficiency and maximizing the impact of fiscal measures." Lan also pointed out the "complex domestic and international situation."
To ensure local financing needs are met, some new local government debt quotas for 2024 have already been issued ahead of schedule.
At 61, Lan, who has limited experience at the central government level, was appointed finance minister last month. His appointment coincides with the government’s efforts to intensify fiscal stimulus aimed at revitalizing the world’s second-largest economy. He takes over from Liu Kun, who had held the role since 2018, and was previously the party chief of Shanxi province.
Lan’s appointment follows a familiar strategy employed by the central government that heavily relies on debt and state spending, though analysts believe this approach lacks necessary deeper reforms.
Recently, the top parliamentary body approved the issuance of 1 trillion yuan (approximately $137 billion) in sovereign bonds for the fourth quarter to finance the rebuilding of areas impacted by floods.
The economy showed signs of strength in the third quarter, growing faster than analyst expectations, which improved the likelihood of the government meeting its full-year growth target of around 5%. However, challenges remain, particularly as a property crisis deepens and private companies are hesitant to invest due to low confidence.
In a related development, state media reported that the ruling Communist Party plans to intensify its oversight of China’s $61 trillion finance sector and enhance efforts to mitigate local debt risks, following a significant financial policy meeting held at the end of October.