China Faces Pressure to Boost Economy, But Rate Cuts May Not Be Enough
- Local special bond quota may be increased, economists say
- Authorities have been cautious in rolling out fiscal support
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Expectations are growing that China’s government will boost spending on infrastructure as part of a broader stimulus push following the central bank’s interest rate cuts.
Authorities may increase the quota for local government special-purpose bonds to finance infrastructure investment, according to Nomura Holdings Inc., Standard Chartered Plc and Morgan Stanley. It’s possible the central government could issue special-purpose bonds, as it did in 2020, or use state policy banks to boost spending, some of the economists said.