On October 12, 2024, China announced a significant increase in government debt issuance, amounting to 2.3 trillion yuan (approximately $325.5 billion), aimed at supporting local governments, low-income citizens, the property market, and state banks' capital. Finance Minister Lan Foan stated that this aid program is the largest since the 2007-2008 global financial crisis.
During a press briefing in Beijing, Lan emphasized the urgency of the measures, citing strong deflationary pressures and a downturn in the property market. He noted that the country will implement more 'counter-cyclical measures' to bolster its economy, which is facing challenges due to weak consumer confidence and an over-reliance on exports amid escalating global trade tensions.
In conjunction with the debt issuance, four of China's largest state-owned banks announced a reduction in mortgage rates, effective October 25, 2024. These cuts aim to alleviate the mortgage burden on homeowners and stimulate the struggling property market, further reflecting the government's efforts to revive economic growth.
The announcement comes after a September meeting of the Communist Party's top leadership, which indicated an increased urgency to address mounting economic challenges. Financial markets have been closely monitoring these developments, as investors express concerns over China's ability to meet its 2024 economic growth target.