China allocates $840 billion to local governments to address hidden debt issues

China will allocate an additional 6 trillion yuan ($840 billion) to local governments over five years to address hidden debt issues. This program starts this year and aims to reduce hidden debt from 14.3 trillion yuan to 2.3 trillion yuan by 2028. The plan includes issuing 800 billion yuan in special bonds annually, totaling 4 trillion yuan. This follows increased fiscal support measures announced after a recent parliamentary meeting, which also reviewed raising local government debt limits. Local governments face significant financial challenges due to a real estate slump and pandemic-related expenses. Analysts estimate hidden debt in China could reach up to 60 trillion yuan ($8.4 trillion).