What's happened
China's National People's Congress has approved a 10 trillion yuan fiscal package to address local government debt, including 6 trillion yuan for refinancing hidden debts. This comes amid economic challenges and expectations of further measures following Donald Trump's election victory in the US.
Why it matters
What the papers say
According to Helen Davidson in The Guardian, the fiscal package is seen as insufficient by some experts, with Professor Victor Shih stating it 'doesn’t come close to resolving the enormous local government debt problem.' In contrast, the South China Morning Post emphasizes the package's potential to stimulate local economies and restore confidence. This divergence illustrates the varying interpretations of the government's approach to economic recovery.
How we got here
China's local governments face significant debt challenges, with hidden debts estimated at 14.3 trillion yuan. The recent fiscal package aims to alleviate this burden and stimulate economic growth amid a struggling economy and external pressures from potential US tariffs.
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