China’s Local Finances Collapse! $80B Yuan Lost, Land Revenue Down 70% in 5 Years—5B Won’t Save It

Oct 03, 2026 - 09:42

Institutional estimates show that subsidizing interest on both new and existing mortgages nationwide would cost more than 300 billion yuan a year, about US$42 billion. By limiting the policy to first-home purchases in the new-home market, however, the central government would spend at most around 40 billion yuan, about US$5.6 billion. At the same time, the People’s Bank of China has also rolled out interest-rate cuts, reserve requirement cuts, and relending tools in an effort to inject liquidity into infrastructure projects such as water networks and computing networks, as well as private businesses.