China approves bill to increase local government debt limit by $837.8B over 3 years

By Emir Yildirim

ISTANBUL (AA) - China approved a bill to increase the debt limit of local governments by 6 trillion yuan ($837.8 billion) over three years, from 2024 to 2026, the South China Morning Post (SCMP) reported on Friday.

The debt limit increase will be spread out over three years, or 2 trillion yuan ($279.2 billion) a year, Chinese Finance Minister Lan Foan said at the Standing Committee of the National People’s Congress (NPCSC) held in Beijing.

The increase in debt limits will be in place instead of existing hidden debts, which will in turn benefit local governments, according to the state-run South China Morning Post.

The minister added that the new policy will result in a decrease in the sum of hidden debts, from 14.3 trillion yuan ($1.9 trillion) to 2.3 trillion yuan ($321 billion) by the end of 2028.