BEIJING, Nov 8 Reuters China will let local governments issue an additional 6 trillion yuan 837.7 billion in bonds to swap for offbalance sheet or hidden debt over three years, an official said on Friday, in a crucial step to lower systemic risks in the flagging economy.

The economy has stuttered in recent months, facing strong deflationary pressures amid weak domestic demand, a property crisis and mounting financing strain for indebted local governments.

Concerns for the longterm outlook have been compounded by the U.S. election win by Donald Trump, who has threatened tariffs in excess of 60 on all Chinese goods.

China39;s top legislative body, the standing committee of the National People39;s Congress NPC, approved a bill on raising ceilings on local government debt during a meeting from Nov. 4 to 8, a top official said.

The debt swaps aim to resolve local debt risks, Xu Hongcai, the vice chairman of the financial and economic affairs committee of the NPC, added at a press conference in Beijing.

The ceiling for local governments to issue special bonds will be raised to 35.52 trillion yuan from 29.52 trillion.

Authorities have sharply ramped up policy stimulus since late September, including interest rate cuts, to help revive the world39;s secondlargest economy and ensure growth will reach the government39;s target of about 5 this year.

China is struggling to tackle the sideeffects from a mountain of debt left from previous stimulus since the global crisis of 2008…