Eyeing US election, China considers over $1.4 trillion in extra debt over next few years 

China is on the brink of approving a massive fiscal package to inject life back into its struggling economy. According to sources familiar with the matter, the Chinese government is considering issuing over 10 trillion yuan ($1.4 trillion) in extra debt over the next few years. This move comes in response to the economic challenges posed by the prolonged property sector crisis and the mounting debt of local governments.

The planned debt issuance, which will involve special treasury and local government bonds, is equivalent to more than 8% of China’s Gross Domestic Product (GDP). This substantial injection of funds aims to stimulate economic growth and address the financial woes that have plagued the country in recent years.

The timing of this fiscal package is particularly crucial, with the outcome of the upcoming U.S. presidential election potentially influencing the decision-making process. If Donald Trump secures a second term in office, the Chinese government may feel compelled to bolster its economic stimulus measures even further in anticipation of potential challenges in the U.S.-China relationship.

This proposed debt issuance underscores the significant impact that global events and political developments can have on the economic policies of major economies like China. As the world’s second-largest economy, China’s financial decisions reverberate across the globe, affecting markets, businesses, and individuals worldwide.

In conclusion, China’s consideration of a massive debt issuance highlights the ongoing challenges facing its economy and the proactive measures being taken to address them. By injecting significant funds into the economy, the Chinese government hopes to reignite growth and stability, positioning the country for a more prosperous future.