China has unlocked 550 billion yuan in unused local government debt quotas to shore up fourth-quarter economic growth and support local finances. More than half of the total, 300 billion yuan in general debt quota, has been allocated entirely to country-level governments to strengthen grassroots fiscal capacity, and the remaining 250 billion yuan in special debt quotas has been allocated to regions that need project financing in the fourth quarter.
The ministry said it will prioritise stronger provincial economies. The Ministry of Finance also released the “Report on the Implementation of China’s Fiscal Policy in the First Half of 2026” on the same day, revealing a more complete policy framework.
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The step counters soft economic data and faltering momentum after the first quarter, as weak domestic demand and a persistent property slump threaten China’s annual growth target of 4.5% to 5%. In recent years, deploying carryover quota in the fourth quarter has become a standard tool for incremental fiscal policy. Ahead of the announcement, many economists expected an extra allowance of about 500 yuan, roughly matching what was offered in 2024 and 2025.
