China top legislative body approved a bill on Friday to allow local governments to issue 6 trillion yuan ($838.8 billion) in bonds to swap for off-balance sheet or "hidden" debt over three years, as policymakers sought to spur the sluggish economy.

China Friday announced a $1.4 trillion economic stimulus that includes a three-year local government re-finance plan for what was described as hidden debt. But it fell short of what many investors believe is needed.

A closely watched meeting of China's parliament on Monday reviewed a proposal to raise the local government debt limit, according to state media.