China to issue CNY 300bln bonds to boost bank capital as local debt tackled | investingLive

China will issue CNY 300 billion in special bonds to recapitalise banks, signalling a concrete move to shore up capital as local government debt remains stressed. The vice premier announced the plan alongside broader measures to strengthen financial supervision and accelerate the resolution of local government debt. The bonds are designed to channel central resources into banks without forcing them to raise capital in wary markets, providing immediate liquidity relief for lenders, particularly smaller regional lenders exposed to local government financing vehicles. Beijing also pledged to open the financial sector further and to establish an offshore financial market system in Shanghai, signaling a broad reform push. The package signals a shift from merely acknowledging capital stress to actively addressing it. Analysts are likely to view the move as a fiscal stimulus dimension rather than a mere recapitalisation, potentially supporting Chinese bank equities in the near term. The vice premier said Beijing will vigorously and orderly advance local government debt resolution, implying a faster reform pace and closer coordination with regulators. The plan also flags accelerated development of marine insurance to support shipping resilience amid global disruptions. The broader statements include a pledge to defend financial security against external suppression, with markets likely focusing first on the fiscal stimulus aspect before weighing geopolitical undertones.