MKsport 2024 shows the construction site of Fuping Railway Station of the Xiong'an-Xinzhou High-speed Railway in north China's Hebei Province. The construction of the main structure of Fuping Railway Station was capped on Monday, which is now followed by steel structure installation.(Photo: Xinhua)" src="https://www.globaltimes.cn/Portals/0/attachment/2024/2024-11-19/772ec9c6-b995-46fd-8ead-0f445722dc1d.jpeg" />

An aerial drone photo taken on Nov. 18, 2024 shows the construction site of Fuping Railway Station of the Xiong'an-Xinzhou High-speed Railway in north China's Hebei Province. The construction of the main structure of Fuping Railway Station was capped on Monday, which is now followed by steel structure installation.(Photo: Xinhua)

In a significant move to address existing hidden debts, local governments across China have taken swift action to implement debt replacement after the approval of a 6-trillion yuan ($840 billion) new local government debt quota for replacing the hidden debts. 

The move will significantly ease the pressure on local governments to dissolve debt and free up more resources for economic development, Chinese analysts said.

On Friday, North China's Hebei Province disclosed a plan to issue 28.1 billion yuan in refinancing special bonds to replace its hidden debts, with a bond term of 30 years. 

On the same day, Southwest China's Sichuan Province announced it is to issue 79.4 billion yuan in refinancing special bonds, which consist of 26 billion yuan for 10-year bonds, 26 billion yuan for 15-year bonds, and 27.4 billion yuan for 30-year bonds.

Additionally, Southwest China's Yunnan Province unveiled its plan to issue 55.5 billion yuan in refinancing special bonds, with 15 billion yuan allocated for 10-year bonds, 15 billion yuan for 15-year bonds, and 25.5 billion yuan for 30-year bonds.

Per latest statistics, a total of 16 provinces in the country have announced that they will issue special refinancing bonds to replace existing hidden debts, with a total issuance amount exceeding 1.0852 trillion yuan, thepaper.cn reported.

The move came after Chinese lawmakers approved a State Council bill on raising the ceiling on local government debt by 6 trillion yuan to replace existing hidden debts, according to a press conference held on November 8.

The Ministry of Finance said that it would allocate the approved debt quota to various localities on November 9, while guiding local authorities to promptly carry out legal procedures, ensure the smooth execution of bond issuance work, and properly allocate bond funds, China News Agency reported.

Debt restructuring will help local governments free up more resources to promote their economic development, while stimulating an increase in effective market demand, Chang Haizhong, executive director of corporates at Fitch Bohua told the Global Times in a written notice.

New government spending will also have a driving effect on the national economy, which will produce a positive impact on the economy in the fourth quarter of this year and 2025, ensuring the government meets its target of GDP growth of around 5 percent for the whole year of 2024, while creating favorable conditions for economic growth next year, Chang noted.

Despite mounting challenges at home and abroad, China's GDP grew 4.8 percent year-on-year in the first three quarters of this year, and the Chinese economy showed further signs of strengthening in October as recent pro-growth stimulus policies provided a fresh boost.

Key economic indicators for the past month have improved markedly, said the National Bureau of Statistics, including growths in retail sales and foreign trade, as well as steady investment and industrial production.

In the fourth quarter, fiscal spending is expected to accelerate, which is likely to boost the quarter-on-quarter economic growth rate, Wu Chaoming, a deputy head of the Chasing Research Institute, told the Global Times in an interview. 

"It is anticipated that there could be more policy easing measures, with room for further cuts in reserve requirement ratio (RRR) and interest rates," Wu said.

Pan Gongsheng, governor of the People's Bank of China, revealed on October 18 that depending on market liquidity conditions, he expects an opportunity to further lower the RRR by 0.25 to 0.5 percentage points before the end of the year.