The reported fiscal measures come as China is mapping out its economic plans for next year, with top leaders hinting at bolder stimulus as Beijing faces tariff threats from the incoming Trump administration. Policymakers have pledged to expand the headline deficit and boost bond sales amid efforts to strengthen fiscal policy and boost consumption.
China’s CSI 300 equity benchmark gained 1.3%. Chinese government bonds extended losses, with the 10-year yield rising four basis points to 1.72% from a record-low close in the previous session. The one-year rate surged 23 basis points.
“It’s bigger than our expectations and shows the government’s willingness to shore up growth through a more sizable fiscal stimulus,” said Michelle Lam, Greater China economist at Societe Generale SA.
She added, however, that part of the reported sum is intended for bank recapitalization and should not be viewed as additional demand measures. Bloomberg previously reported China was considering injecting as much as 1 trillion yuan of capital into its biggest state banks to increase their capacity to support the struggling economy.
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The State Council Information Office didn’t immediately respond to a faxed request for comment.
