China's 2024 Fiscal Stimulus and Debt Challenges

China plans to run a budget deficit of 3% of GDP in 2024, with a focus on improving fiscal spending structure. The government aims to issue special sovereign bonds to cover additional expenditures and may also issue off-budget sovereign debt to support the economy. The fiscal stance is influenced by debt-laden local governments, state firms, and the property crisis, with Moody's downgrading China's sovereign rating due to these challenges. The government plans to issue 1 trillion yuan in sovereign bonds for flood-prevention infrastructure by year-end.