Piling on more debt to solve a debt issue? That's new. It is being reported that China policymakers are considering to issue at least ¥1 trillion of additional sovereign debt for spending on infrastructure in order to try and bolster growth prospects. In turn, that could raise the budget deficit for the year to be well above the 3% cap set out in March.
On paper, this sounds good but I still think China really needs to step up their fiscal game for there to really be a difference. Otherwise, it's hard to see how this and the other stimulus measures before can help to dig them out of this sinking hole.
