Local govt spending to stabilize growth

Local government spending will play a major role in stabilizing China's economy, depending on the speed of issuing special debt instruments when companies slow investments, according to economists.

The 661.3 billion yuan ($94.47 billion) in renminbi-denominated new loans in October, the lowest level in nearly three years, indicated a weaker fund demand especially in non-financial companies, in line with the further dip in production prices, according to data from the central bank and the National Bureau of Statistics.

To stabilize growth, provincial-level local governments have proposed new quotas of the special purpose bond, which is a debt instrument especially to raise capital for infrastructure construction. Local governments are waiting for the approval by top-level policymakers, some experts close to the Ministry of Finance told China Daily on Tuesday.