Beijing mulls buying unsold homes for 4 trillion yuan

The Chinese government is said to be considering issuance in the next five years of 4 trillion yuan (US$561 billion) in special treasury bonds in order to fund the purchase of unsold homes and idle sites in an effort to reduce inventory in the markets and support property prices.

The issuance of these bonds will come on top of the previously-reported issuance of 6 trillion yuan in ultra-long special treasury bonds, which will be implemented over the next three years, Reuters reported.

It is expected that these long-term money printing schemes will be discussed in the coming standing of the National People’s Congress (NPC) Standing Committee between November 4 and 8.

The meeting was originally scheduled for late October but it was postponed to November with some media reports saying that Beijing wants to make its final decision after the United States presidential election.

In case the election’s winner is Republican candidate Donald Trump, who vowed to impose a 60% tariff on all Chinese goods, China may need a stronger stimulus package to maintain its economic growth for the next few years, Reuters reported, citing two unnamed sources.

Mysterious local debt figure

The news about China’s stimulus package came after Li Jianjun, vice president of the Central University of Finance and Economics and an economist, said in a public speech at the Financial Street Forum 2024 in Beijing on October 18 that China’s debt-to-GDP ratio had increased to about 103% as of the end of June this year.

Li’s comments were reported by foreign media only this week. They seemed different from Beijing’s propaganda in recent years claiming that China’s debt situation remained healthy.

Li said China’s local government financing vehicles (LGFV)