China's Biggest State Banks Offer 25-Year Loans to LGFVs

Chinese state banks are offering extended loans to local governments' borrowing arms, RGIVs, with tenures up to 25 years, compared to the usual 10 years for corporate borrowers. This move aims to support local governments facing financial difficulties due to increased COVID-related spending and reduced income from land sales. The exact impact of these loans is uncertain, but they are part of broader measures to stimulate the economy, including infrastructure investment and interest rate cuts.

Discuss the implications of the credit crunch on the broader economy in China.

What measures are being taken by state banks to stimulate the economy post-COVID-19?