Before 2023 begins, the Communist Party of China is going to hold its 20th Party Congress, in which the country’s authorities want to keep Xi Jinping in power until 2027. This event usually takes place in October or November, and Beijing wants the Asian giant’s economy to be polished for the occasion.
To do this, the Chinese government is preparing a bond issue of nearly 220,000 million dollars to invest in infrastructure, an operation with which it intends to give a boost to the economy and achieve the 5.5% growth target. , in a year in which the situation has become complicated in China.
In fact, the growth of the GDP during the first quarter of the year was already lower than this figure, with 4.8%, and the forecasts for the publication of the GDP data for the second quarter, which will be known on July 15, point to an increase of 1% year-on-year during this period , and there are many analysts who predict that the country will not be able to meet its growth target during this very difficult year. In fact, from Bloomberg they doubt that there was growth in the second quarter.
There are activity data that confirm the slowdown: today domestic flights are more than 50% lower than last year, and truck transport by road would be 20% lower.
The debt issue is being prepared in such a way that it is deducted from next year’s quotas , something that has never happened in the country until now. To date, China maintains a financing limit via emissions to local governments of 3.8 trillion yuan per year, about 500,000 million dollars each year.
Discounting part of the emissions that would be reserved for next year is one more reason that confirms that the Government wants everything to be perfect the year of its 20th Communist Party Congress. Already in the first half of the year, the local governments would have exhausted the quota that had been reserved for the whole of the exercise, which seems to have forced the authorities to use part of the funds for the coming year.
China continues to fight the Covid-19 pandemic, and 2022 is when it has had to face the largest wave of infections since the health crisis began. The 220,000 million will be added to the more than 100,000 million for infrastructure that China has announced in recent weeks.