Beijing pledges $100b in additional Belt and Road funding as China’s GDP growth closes on 5% target
ALBAWABA – Beijing will inject over $100 billion in new Belt and Road initiative funding, the Chinese President announced Wednesday, as China's GDP growth reportedly exceeded the expectations of both Bloomberg and Reuters’ analysts, closing on to the annual 5 percent target of the government.
Figures reported by Bloomberg on Wednesday showed China’s gross domestic product (GDP) for the third quarter of 2024 expanded 4.9 percent year-on-year and 1.3 percent from the previous quarter.
China’s GDP growth figures got a boost from bumper retail sales growth last month, recording the biggest leap since May, as unemployment fell to the lowest in nearly two years, according to Bloomberg.
However, turmoil in the real estate sector still threatens the country’s economy. Especially as Country Garden default talk swirl with the offshore debt deadline elapsed, as reported by Reuters.
Another Country Garden coupon payment deadline, worth $15 million, has expired without word of payment, according to Reuters.
The debt-laden real estate sector pose risk to China’s GDP growth - Shutterstock
Concerns are mounting on China's biggest private property developer possibly defaulting on its offshore debt as the nation's real estate woes deepen.
Woes from debt-laden real estate sector pose risk to China’s GDP growth
Failing to pay would trigger defaults across the board in other Country Garden bonds as is standard in bond contracts, as the company has nearly $11 billion out in offshore bonds.
Any such default would set the stage for one of China's biggest corporate debt restructurings and would put a dent to the country’s GDP growth rate.
Meanwhile, China’s GDP growth in the third quarter beating expectations has somewhat offset concerns stemming from a debt-laden property sector.
It supports optimism that China’s stimuli have actually paid off in terms of strengthening demand and reinvigorating economic activity.
Bloomberg News reported last week that Beijing was mulling on issuing almost $140 billion in sovereign debt to boost China’s economy, with cash that would be spent on various projects.
However, data Wednesday also showed industrial production growth in September remaining flat at 4.5 percent, signalling the need for more support, according to Agence France-Presse (AFP).
On the regional front, at a summit on the project's 10th anniversary, President Xi Jinping said China Development Bank and Export-Import Bank are offering $100 billion in loans, AFP reported.
Both banks will set up financing opportunities worth $47.9 billion for BRI projects, he said, and an additional $10.9 billion will be injected into the project's official lending institution, the Silk Road fund.
The Belt and Road is a central pillar of Xi's bid to expand China's clout overseas, with Beijing saying it has now inked over two trillion dollars in contracts around the world.
