China announces £1.1 trillion bailout to support struggling economy
China has announced a £1.1 trillion bailout package to support its struggling economy, primarily aimed at helping local governments manage significant debts from past infrastructure and real estate investments. This plan allows local authorities to issue bonds over three to five years to restructure around 14 trillion yuan in hidden debts. Despite the scale of the bailout, investor reactions have been cautious, with many expressing disappointment over the lack of measures to boost household consumption. The renminbi weakened against the dollar, and bond yields fell slightly, indicating market skepticism about the effectiveness of the plan. The bailout includes £660 billion in new bonds and reallocates an additional 4 trillion yuan from previous bond issues. Officials aim to reduce borrowing costs and stabilize local finances, but analysts warn that deeper structural reforms are needed to address ongoing challenges in the housing sector and trade pressures from the United States.