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One measure of borrowing by China’s local governments for infrastructure is on pace to hit a six-year low, as Beijing clamps down on risks in a strategy shift that calls into question its promise to stop an unprecedented investment slump.Of the 4.4tn yuan ($626bn) quota for new local government special bond sales this year, around 3.02tn yuan is available for infrastructure projects — the lowest since 2019 — after the remaining 1.38tn yuan was used to repay loans, according to Bloomberg calculations based on official data. That puts the amount of bonds meant for investment in line to decrease for a second straight year.The restraint is ushering in a new economic era for China after decades of leaning on local governments to pour money into a network of roads, railways and industrial parks. Fixed-asset investment is on track for its first annual decline in data going back to 1998, after a crash made worse by the drought in funding for infrastructure.“The contraction in FAI signals a break in China’s pattern of economic growth,” said Adam Wolfe, an economist at Absolute Strategy Research. “The restrictions on local government investment are likely to continue into 2026.”While Wolfe expects investment to extend its drop in the first half, he said its trajectory later in the year is uncertain.Behind the downturn is China’s campaign to rein in so-called hidden local debt, along with increasingly stringent rules for screening projects to ensure they generate sufficient returns. Coupled with stubbornly subdued business sentiment and a deepening property downturn, waning government funding support has fuelled a rapid pullback in overall capital spending in recent months.Infrastructure investment contracted by about 12% on year in both October and November, according to Macquarie Group’s estimates based on official figures.Top leaders have vowed to reverse the plunge next year. Yet Beijing’s focus on fiscal sustainability and what it deems as quality driven growth will likely leave local officials in a bind.“A large part of the slump seems to be due to harder local government budget constraints and restrictions on their investment promotion activities,” Wolfe said. “This could shift the economy away from a model based on the regional competition to attract investment to one where central government macro control policies are more effective.”China has been moving responsibilities for borrowing and spending from localities and putting them in the hands of the central government in recent years since it boasts a relatively healthier balance sheet.The country’s top economic-planning agency has acknowledged that deeper factors are at play in putting a limit on investment.In an article last week, the National Development and Reform Commission pointed to a rapidly aging population, slower urbanisation in some regions and a saturation of infrastructure. It also said manufacturers around the country face competition that’s increasingly undifferentiated with low value-added content.The NDRC repeated President Xi Jinping’s definition of high-quality growth, whose criteria include profitable investment.It listed a number of sectors where the government plans to channel capital spending, which range from utilities, public services and advanced manufacturing to low carbon development across energy, transport, construction and consumer industries.As provinces shoulder less of a burden, officials have also pledged to increase the central government’s budget spending on projects and tap the quasi-fiscal financing tools at state-owned policy lenders to help achieve the goal of halting the investment drop next year.But for special local bonds, they only promised to streamline the management of sectors receiving the funding, without hinting at a meaningful expansion in the quota.Lynn Song, chief Greater China economist at ING Bank NV, said the call for stabilising investment reflected “genuine” concern among top leaders over the decline. That said, he expects the authorities will keep the taps of stimulus open just enough to counter any worse-than-expected headwinds for exports and ensure steady economic growth.“We’ve seen pretty measured policy support in the last few years, and this is probably going to continue,” he said.Even if the government ramps up spending, it’s unclear whether that will translate into stronger private investment, with uncertainty and weak confidence still weighing on activity, he said. The key question is whether any pickup is “only seen in public sector investment or if private investment can see a genuine recovery,” he added. 

The International Monetary Fund (IMF) linked China’s booming exports and growing trade imbalances in part to a real depreciation of the yuan, a subtle shift in its stance that adds to rising global concerns over the currency’s weak exchange rate.In carefully worded remarks following the conclusion of the IMF’s annual review of China’s economy, fund officials said the country’s low inflation relative to price levels among its trading partners has led to a weaker yuan in real terms. They urged Chinese policymakers to adopt bolder stimulus to boost consumption, which would lift consumer prices, while allowing more exchange rate flexibility.“As the second-largest economy in the world, China is simply too big to generate much growth from exports,” IMF Managing Director Kristalina Georgieva said at a press briefing in Beijing on Wednesday. “Continuing to depend on export-led growth risks furthering global trade tensions.”The IMF didn’t explicitly recommend that China should push for the yuan’s appreciation, she said.China has moved fast in recent years to gain manufacturing dominance, drawing accusations from the likes of Donald Trump over maintaining an undervalued exchange rate that gave its exporters an edge over their competitors and helped it amass trade surpluses.While the IMF has been largely silent on the fair value of China’s currency in recent years, its latest remarks appeared to be siding with critics in echoing growing calls abroad and within China for a stronger yuan. The currency’s inflation-adjusted exchange rate fell to the lowest in more than a decade due to persistent falling prices in China, which made its exports more competitively globally.The debate is playing out against the backdrop of China’s goods trade surplus surging to a record of above $1tn in the first 11 months of this year. Countries fearful for the future of their industries are increasingly pushing back against the flood of Chinese exports.China maintains a “managed float” of the yuan and has a number of tools to influence the exchange rate. Officials have repeatedly said they aim to keep the currency “basically stable,” allowing the yuan to appreciate slightly this year and at times using its daily fixing to discourage rapid moves.Even as the yuan heads for its first annual gain since 2021 in both onshore and offshore markets, Goldman Sachs Group Inc estimates the yuan is 25% undervalued and will appreciate more than forwards contracts are pricing for 2026.The IMF has in recent years been advising China to increase the flexibility of its exchange rate. A decade ago, the IMF dropped a long-held view that the yuan was undervalued, ahead of the currency’s inclusion in the fund’s Special Drawing Rights basket of reserve currencies.“What we want to see is a market-based exchange rate that reflects fundamentals,” Georgieva said.External imbalances are becoming more pronounced for China, according to the IMF, with its current account surplus projected to reach 3.3% of gross domestic product in 2025.Earlier in 2025, an annual technical analysis by the IMF found that the yuan’s real effective exchange rate was 8.5% weaker than its estimated equilibrium level, based on a current account surplus of 2.3% of GDP last year. The surplus reached 3.4% in the third quarter of this year, the highest since late 2010, according to Bloomberg calculations. 

Two giant pandas were flying home from France to China for retirement Tuesday, after the female was diagnosed with kidney failure, with a Chinese official pledging new bears would soon replace them.Huan Huan and her partner Yuan Zi arrived at the Beauval Zoo in central France in 2012 as part of China's "panda diplomacy" programme, which sees the black-and-white bears dispatched across the globe as soft-power ambassadors.The two pandas, both 17, were meant to stay in France until January 2027, but they left in a plane Tuesday to live out their retirement at China's Chengdu panda sanctuary.The pair were loaded onto a plane at Paris's Charles de Gaulle airport, each in their own box dotted with ventilation holes, with the words "Bon voyage" inscribed on the side.Before they departed, a Chinese embassy official promised new bears would soon be dispatched to make up for the popular pair leaving."Rest assured, French friends, new giant pandas will arrive in the future," said Chinese embassy official Chen Dong.More than 200 well-wishers had braved the cold and rain on Sunday to say farewell, including one couple dressed head-to-toe in panda-themed gear, who say they have visited the bears "more than a thousand times" since their arrival in 2012.Patrice Colombel, an electronics technician, and his wife Veronique, an administrative assistant at a secondary school, told AFP they would not have missed the chance to see them off."They are the first pandas we have ever known. We wanted to be there to say goodbye to them," the couple visiting from the southwest city of Bordeaux told AFP.The pair produced three cubs while in France — the first pandas to do so in the country — and became star attractions at the Beauval zoo in Saint-Aignan-sur-Cher, which welcomed some two million visitors in 2023.The decision to send them back to China came after Huan Huan was diagnosed with chronic kidney disease — a common condition in bears around her age, according to zoo director Rodolphe Delord.The move came with "a twinge of sadness", Delord said.But the twins born in 2021 are expected to remain at Beauval for now, said Delord, adding he hopes to extend the zoo's partnership with China beyond 2027.The eldest of the offspring, Yuan Meng, left France for China in 2023.Panda keeper Delphine Pouvreau said their departure would be "very hard" for the caretakers, who have forged a strong bond with the bears."We experienced the first birth of a baby panda in France here," she said, adding the memory would remain "engraved in our hearts".The giant panda was downgraded last year from "endangered" to "vulnerable" on the global list of at-risk species.Only about 20 zoos outside China have pandas, which have become a symbol of Beijing's diplomatic friendships.China has been using so-called "panda diplomacy", in which the bears are sent across the globe as soft-power ambassadors, for decades.In 1972, it gifted a pair of pandas to Washington, following US president Richard Nixon's historic visit to the Communist nation.

China's yuan-denominated loans rose 14.75 trillion yuan (about $2.08 trillion) in the first nine months of the year, central bank data showed on Wednesday. Of the total, household loans grew by 1.1 trillion yuan, and loans to enterprises and public institutions increased by 13.44 trillion yuan, according to the People's Bank of China. Outstanding yuan loans stood at 270.39 trillion yuan at the end of September, up 6.6 percent year-on-year, according to the central bank. The M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 8.4 percent year-on-year to 335.38 trillion yuan at the end of September. The M1, which covers cash in circulation, demand deposits and client reserves of non-bank payment institutions, stood at 113.15 trillion yuan at the end of last month, up 7.2 percent year-on-year. The M0, which indicates the amount of cash in circulation, increased 11.5 percent year-on-year to 13.58 trillion yuan at the end of September. According to preliminary statistics, the aggregate financing to the real economy was 30.09 trillion yuan in the first nine months, which was 4.42 trillion yuan more than the same period last year. The outstanding aggregate financing to the real economy stood at 437.08 trillion yuan at the end of September, registering 8.7 percent year-on-year growth.

China's total goods imports and exports in yuan-denominated terms rose to 33.61 trillion yuan (about $4.73 trillion) in the first nine months of 2025, up 4% year-on-year, official data showed Monday. The growth rate accelerated from an increase of 3.5% registered in the first eight months of the year, according to the General Administration of Customs (GAC). Goods exports led the overall expansion during the January-September period, surging 7.1% year-on-year to 19.95 trillion yuan, while imports stood at 13.66 trillion yuan, a slight decrease of 0.2%, Xinhua News Agency reported. In September alone, China's goods imports and exports increased by 8% year-on-year to 4.04 trillion yuan — marking the highest monthly increase so far this year. In the first nine months of 2025, China's goods trade with Belt and Road partner countries totaled 17.37 trillion yuan — 6.2% higher than a year earlier, GAC data revealed. Trade with ASEAN, Latin America, Africa and Central Asia grew by 9.6%, 3.9%, 19.5% and 16.7% year-on-year, respectively, while that with other economies in the Asia-Pacific Economic Cooperation increased by 2%.

China's fiscal revenue edged up 0.3 percent year on year to 14.82 trillion yuan (about 2.09 trillion US dollars) in the first eight months of this year, according to data released by the Ministry of Finance on Wednesday.The central government collected about 6.43 trillion yuan in fiscal revenue during the period, down 1.7 percent year on year, while local governments collected 8.39 trillion yuan, up 1.8 percent year on year, according to (Xinhua) news agency.In the first eight months, the country's tax revenue totaled 12.11 trillion yuan, edging up 0.02 percent year on year, while non-tax revenue increased 1.5 percent to 2.71 trillion yuan.China's fiscal expenditure expanded 3.1 percent year on year to 17.93 trillion yuan in the first eight months. The central government's fiscal expenditure rose 8 percent year on year, and there was a 2.3 percent increase in local government expenditure during the same period.Spending on education came in at approximately 2.71 trillion yuan, up 5.6 percent year on year. Science and technology expenditure reached 587.4 billion yuan, marking a 3.1 percent year-on-year increase.Spending on social security and employment stood at 3.07 trillion yuan, up 10 percent year on year.