MNI BRIEF: China Has Room For More Debt, Higher Deficit - MOF

MNI (BEIJING) - China's Finance Ministry will increase the debt limit substantially to support local governments to resolve off-balance sheet debts and issue special treasuries to replenish core tier-one capital of large state-owned commercial banks, Finance Minister Lan Foan told reporters on Saturday, noting more additional countercyclical measures are under consideration.

He said the central government had substantial room for borrowing and raising its deficit-to-GDP ratio further, adding that the detailed amount of the stimulus package will be announced later after "legal procedures."

The package of additional policies also includes measures to support the real-estate market and increase subsidies for low-income groups, Lan added.

MNI noted any new government borrowing may need to wait for the approval of the Standing Committee of the National People’s Congress later this month.