China Addresses Local Debt Crisis

Regulators in China conducted a video conference involving central and regional authorities to tackle financial risks, concentrating on local debt resolution and modifications to real estate loan strategies. Deteriorating finances of local governments have impeded the central government's use of fiscal measures to bolster the economy, compounded by reduced land sales stemming from a real estate market decline, affecting local revenue streams. China has been cautious about implementing stimulus measures, prioritizing preventing financial risks. The recent meeting marks a shift in approach involving a new set of financial policymakers as part of China's regulatory system overhaul.