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China has pledged to increase debt significantly in efforts to boost its struggling economy. Finance Minister Lan Foan announced plans to help local governments address debt issues, provide subsidies to low-income individuals, support the property market, and inject capital into state banks. Despite the lack of a specific dollar amount for the stimulus package, investors remain hopeful for a clearer policy roadmap in the near future.

Recent economic data has fallen short of expectations, raising concerns about China’s growth target for the year. Speculation about new fiscal stimulus has been widespread following a meeting of China’s top leaders, which led to a surge in the stock market and volatile commodity markets.

Reports suggest that China is planning to issue special sovereign bonds and inject capital into state banks as part of the stimulus package. The Central bank has also implemented aggressive monetary measures to support the economy.

While these measures have boosted market sentiment, analysts believe that deeper structural issues need to be addressed, such as increasing consumption and reducing reliance on debt-fueled investment. China’s household spending is below the global average, highlighting the need for reforms to boost domestic demand.

Overall, China’s focus seems to be on addressing fiscal gaps and government debt risks, but more measures targeting demand and investment may be needed to alleviate deflationary pressure. Further reforms are expected to be announced step-by-step in the future.

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