Economists, strategists and fund managers expect new fiscal stimulus if Finance Minister of China Lan Fo’an does not disclose it in China on Saturday, it is expected to be announced within the next six months. 

Up to 2 trillion yuan (USD 283 Billion) is anticipated to be used to support the economy and increase confidence. This is according to a majority of 23 market participants surveyed by Bloomberg.

The focus is on targeted measures to help households, moving away from the previous strategy of relying on real estate investment for growth.

The government is considering borrowing more, converting “hidden” debt into lower-interest bonds, and increasing transfer payments to support localities. 

Plans are in place to issue nearly 9 trillion yuan in new government bonds this year and potentially use unused bond allowances.

Unused bond allowances from previous years generally do not require approval from the national legislature. Official data shows that the central and provincial governments had about 2 trillion yuan in unspent quotas remaining as of the end of 2023.

The government aims to boost consumer spending by providing more subsidies for groups such as older people and the poor and distributing consumption vouchers. 

Families with children may also receive more support, and the social safety net could be expanded. Additionally, there may be increased subsidies for purchasing consumer goods and cars.

The government is looking to rebalance the economy and reduce its reliance on exports for growth. China’s gross domestic product grew slowly from April to June, and subsequent data indicated weak domestic demand, leading to deflation amid low consumer and business confidence.

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