A leading economist in China said the country has room to ramp up fiscal support for the economy by issuing as much as 10 trillion yuan ($1.4 trillion) in special debt, reflecting rising expectations for Beijing to expand public spending as part of its stimulus package.

Jia Kang, a former head of a research institute affiliated with the Ministry of Finance, said authorities could lift confidence by drastically raising government investment in public projects. He spoke in an interview with Chinese publication The Paper published Tuesday.

“As these projects get underway, they will create jobs, increase income for citizens, and unlock consumption potential,” said Jia, who now leads the China Academy of New Supply-Side Economics, a private think tank. Without giving a possible timeline, he said “scaling up the bond issuance now to 4 trillion or even 10 trillion yuan would not be excessive.”

The comments add to a growing discussion over what the Ministry of Finance will — or should — do to boost the world’s No. 2 economy after Beijing signaled its desire to draw a line under its growth slowdown. The elite 24-man Politburo urged officials to issue ultra-long special sovereign bonds and local special notes to drive investment without giving specifics, fueling speculation on the strength of the fiscal measures. The debt issuance Jia suggested would be many multiples of the 1 trillion yuan in ultra-long special sovereign bonds the government planned to sell this year. But he said that would be a proportional increase from the 4 trillion yuan stimulus package in 2008, given China’s gross domestic product had quadrupled in nominal terms by the end of 2023.

“Using public debt mechanisms properly won’t overburden the government,” he told The Paper. “Long-term and ultra-long-term government bonds, with 30- to 50-year maturities, offer significant flexibility and are worth utilizing, remaining within safe limits.”

Reuters reported last week that the Ministry of Finance is planning to issue 2 trillion yuan of special sovereign bonds this year. That funding will be evenly split between stimulating consumption and helping local governments tackle debt problems, the news agency said, citing two people familiar with the matter.

The ambitions set out by Jia are “realistic,” according to Becky Liu, head of China macro strategy at Standard Chartered Plc. “This is more about the willingness to support, not so much about the quantity — if it is not enough, there will be more until it is enough,” she said.

Economists at HSBC Holdings Plc estimate direct fiscal stimulus will amount to 1 trillion yuan, with a potential package split between boosting consumption and funding large projects. The total amount could be double that or more, including funds for recapitalizing banks to shore up big lenders, economists including Jing Liu wrote in a note Thursday.

Beijing’s stimulus blitz fueled a rally in stocks, with the the benchmark CSI 300 Index jumping the most since 2008 on Monday before the country entered a weeklong holiday. A gauge of Hong Kong-listed Chinese companies rose for 13 straight sessions on stimulus optimism until a pullback on Thursday, when it fell 1.58%.

Danske Bank A/S called the efforts the biggest stimulus measures since the global financial crisis, revising its growth forecast for China next year to 5.2% from 4.8%. The country will gradually become less of a global disinflationary factor and more a neutral force as the economy stabilizes, the bank’s chief China economist Allan von Mehren said in a note on Wednesday.

Now the focus is turning to any coming fiscal support. Economists believe greater spending is needed to boost domestic demand, with consumer confidence falling to its weakest in August since November 2022.

“In the near term, the conventional fiscal policy is the key to watch, as the government will disclose more details,” Macquarie Group Ltd. economists Larry Hu and Yuxiao Zhang wrote in a note on Monday. “Later in October, the government may announce more quota for special sovereign bonds or special local government bonds.”

In 2023, China’s top legislative body used its October session to authorize the issuance of 1 trillion yuan in additional special government bonds.

Nomura’s chief China economist Lu Ting said the government could invest in mega infrastructure projects, increase spending on social security and directly fund delayed housing projects — effectively becoming the “builder of last resort.” But he added that the government would have to face some constraints as it considers its fiscal options.

“Beijing will surely roll out a raft of fiscal measures and other supportive policies, but the eventual scale and content of the fiscal package might be quite improvised and uncertain due to the brewing stock bubble and still-controversial debates on what Beijing should focus on,” Lu wrote in a note on Thursday.

Morgan Stanley economists including Chetan Ahya echoed the caution, citing factors including the country’s current debt burden. China’s debt-to-GDP ratio rose to a record 286% earlier this year, according to central bank and statistics bureau data compiled by Bloomberg.

“The ask for fiscal expansion will only increase from here,” Ahya, chief Asia economist, and others wrote in a Tuesday note. “While there is as such no hard limit on how expansionary fiscal policy can be, we believe that policymakers may be naturally hesitant to provide significant accommodation against the backdrop of wide fiscal deficits and elevated levels of public debt.”