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China Should Expand Gov Debt, Cut Rates In H2-CF40 Report

CHINA PRESS
MNI (Singapore)

China should expand government debt financing in the second half of 2022 to fill a funding gap of not less than CNY3 trillion to help boost infrastructure investment and support economic growth, as local governments with falling land sales and tax revenues are finding it hard to meet their spending targets, according to a report by China Finance 40 Forum. Issuing special treasury bonds, fiscal discount bonds and policy financial loans can be considered. Meanwhile, the central bank should cut the policy rate by 25 basis points, and should continue until the economy revives with high vitality for more than two consecutive quarters, as rate cuts will greatly help improve corporate cash flow and increase demand, the report said.

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