China approves $840 billion plan to refinance local government debt and stimulate economy

China has approved a plan to refinance local government debt worth 6 trillion yuan ($839 billion) to stimulate its economy. This initiative will unfold over three years, with 2 trillion yuan allocated annually from 2024 to 2026. The plan aims to address the hidden debt of local governments, estimated at 14.3 trillion yuan ($2 trillion) at the end of 2023. Officials expect this hidden debt to decrease to 2.3 trillion yuan ($320.9 billion) by 2028. Additionally, the limit for local governments to issue special bonds will increase from 29.52 trillion yuan ($4.12 billion) to 35.52 trillion yuan ($4.96 billion). This marks a significant shift in China's approach to managing local government debt.