China's got a big trillion dollar plan to keep its local governments out of the red.

Good morning. This is the Marketplace Morning Report, and we're live from the BBC World Service.

I'm Leanna Byrne.

China has announced a massive $1.4 trillion financial package made up of bonds and other funding,

aimed at keeping its local governments afloat.

The BBC's Stephen MacDonald has read the fine print for us on this one. Hi Stephen.

Hello, how are you going? Can you explain to us the significance of this debt relief package?

Well, what they're hoping to do is to kickstart the economy somewhat at a local level

by allowing local governments to go further into debt.

Now, this is to the tune of $6 trillion or $840 billion dollars over three years,

and the mechanism to achieve it will be via the issuance of bonds, which will then be swapped

for supposedly off-balance sheet debt, or hidden debt.

It might sound a bit complicated, but in short, what it means is that local governments can

borrow some more money and what might they do with that.

Well, for example, they can

purchase unused land for developments and that this could in turn help give the property

sector a bit of a boost, given that the property sector has been just such a huge headache

for the Chinese economy in recent years. I mean, at one point, it was making up a quarter

of all GDP in China. That's why it's been such a disaster that it's in the doldrums. And so the

government, with one eye on Donald Trump being elected and the possibility of the coming tariffs

is looking for ways to boost the economy here. All right. Well, we'll have to see whether it works or not.

The BBC's Stephen MacDonald.

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