China announces $1.4 trillion debt package to support local governments

China has announced a 10 trillion yuan ($1.4 trillion) debt package to help local governments manage their finances and support economic growth. This approach focuses on repairing municipal balance sheets rather than providing direct economic stimulus. The new measures include increasing local government debt quotas by 6 trillion yuan over three years and allowing an additional 4 trillion yuan in previously approved issuances. This aims to address "hidden debts," which are loans and credits from local financing vehicles. Local governments are facing high debt levels and declining revenues, leading to cuts in civil servant pay and strained finances. The package is seen as insufficient by some analysts, who believe a larger debt solution is necessary to effectively support the economy.