News Analysis
Beijing announced on Dec. 9 the issuance of 750 billion yuan (about $108 billion) worth of special sovereign bonds aimed at stimulating the Chinese economy. Experts believe the move indicates that China faces a looming economic crisis, but it could give “local governments some breathing space” from their massive expenditures under the zero-COVID policy.
A prominent Chinese economist estimates China’s tax base has dropped about 15 percent from the pre-pandemic baseline. The tax base is the total income, assets, or other economic activity on which the government can levy a tax.
Starting on Dec. 12, the People’s Bank of China will issue the 2022 special bonds to relevant domestic banks in the inter-bank bond market. The notes are three-year fixed-rate interest-bearing bonds that can be listed and traded publicly….