China gave indebted local governments a 10 trillion yuan ($1.4 trillion) lifeline but stopped short of unleashing new stimulus, preserving room to respond to a potential trade war when Donald Trump takes office next year.
Officials unveiled details of a program to refinance "hidden” local debt onto public balance sheets at a press briefing in Beijing on Friday. Funds for that program — telegraphed last month but without a price tag or time frame — will be provided through 2028, they said, after the move was authorized by the nation’s top lawmaking body.
While policymakers didn’t announce measures to directly stimulate domestic demand, Finance Minister Lan Fo’an promised "more forceful” fiscal policy next year, signaling bolder steps could come after Trump’s inauguration in January. The U.S. president-elect has threatened 60% tariffs on Chinese goods that could decimate trade between the world’s largest economies, and blight exports that have been a rare bright spot for the Asian nation this year.
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