China Rolls Out 1 Trillion Yuan Debt Plan for Disaster Recovery and Prevention Amid Economic Challenges

Funds to be allocated over the next two years for disaster-stricken regions, aimed at maintaining 5% economic growth despite lukewarm recovery and an ongoing property market slump.

China unveiled a 1 trillion yuan ($137 billion) sovereign bond issue, aiming to bolster disaster-stricken regions and maintain a 5% growth target amid economic challenges including a sluggish recovery and a declining property market.
The considerable fund, expected to be allocated over the next two years, will be focused on the reconstruction of areas severely affected by natural disasters and catastrophe prevention.
The majority of the funds are not expected to be utilized until next year or even later due to the seasonal timing of the natural disasters that struck China's northern region this summer.
Economic experts believe that while the 1 trillion yuan fund presents as a substantial figure, it is only around 5% of transfer revenues or 2% of the total revenues for local governments, indicating it may not significantly impact local government's funding base.
Despite the ongoing property market slump and lukewarm recovery from the pandemic, China's economy remains on track for the Beijing government's target of a 5% growth this year.