(Oct 9): China has allowed its provinces to tap 550 billion yuan (US$82 billion or RM335.2 billion) in unspent bond quotas saved from previous years, as Beijing adds to a stimulus effort aimed at meeting this year’s growth target.

The allowance includes 300 billion yuan in general bond quota to help county-level authorities meet their daily spending needs, the Ministry of Finance said in a statement on Friday. The other 250 billion yuan in special bond quota is granted to regions “with actual project funding needs” to support existing programmes and major initiatives like the Six Networks to drive investment in October-December, it said, adding that stronger provincial economies will be favored.

Before the announcement, economists broadly expected the additional allowance to be at 500 billion yuan, roughly half the total still available and similar to what was granted in 2024 and 2025. The ministry’s clarification on the use of some of the bonds to meet general needs on the local level highlights the financial stress faced by counties and lower-level governments.

Greater access to borrowing will enable local governments to fund more investment and give room to cope with their debt burdens. It’s the latest instalment of the stimulus package unveiled by Beijing in late September to shore up economic growth that had slipped below this year’s target of 4.5%-5%.

As part of that effort, the government has already started providing mortgage subsidies and expanded central bank support for targeted sectors. It acted soon after the State Council, the country’s cabinet, vowed new measures to meet economic and social development goals.

Among the newly announced steps, some analysts view the use of unspent local bond quotas as the most effective lever at Beijing’s disposal to get growth back on track. BNP Paribas SA economists led by Jacqueline Rong expected it to become “the backbone of the fourth-quarter mini-stimulus package.”

Uploaded by Magessan Varatharaja