Chinese local government bonds issued USD179 billion in August, hitting annual highest
(Yichai) September 4 – Chinese local governments issued the largest amount of bonds in August of any month so far this year, amounting to CNY1.3 trillion (USD179 billion) in a bid to boost investment and stabilize the economy.
The finance ministry intends for local governments to issue most of their annual special bond quotas, which mainly finance key infrastructure projects such as industrial parks, transport links and affordable housing, before the end of September and as soon as possible. Use the. That, many experts said, should expand investment and help stabilize the broader economy.
In the first eight months, China’s local government bond issuance rose 3 percent from a year earlier to CNY6.3 trillion (USD868 billion), a record high for the period. Of this, new special bonds came in at CNY3.1 trillion and refinanced bonds jumped 44 percent to CNY2.6 trillion.
Wen Laicheng, a professor at the Central University of Finance and Economics, told Yicai that special bonds should be used for public welfare projects with specific returns, and although the investment scope is large, it can be further expanded. .
Wen said, broadening the scope of special bonds can better meet the actual conditions in different places and promote the establishment and operation of special loan projects.
Issuance of refinanced bonds has increased, mainly due to the large amount of debt due this year with approximately CNY3.6 trillion (USD495 billion). Experts said local governments have become more reliant on issuing refinanced bonds to repay older loans, as fiscal revenue grows slowly and because of the concentration of maturing loans.
How to strengthen management and improve the efficiency of the use of special debt bonds has also become a focus for regulators in recent years. Many Special Bonds have not given expected returns due to non-compliance of investment guidelines, misappropriation of funds and idling of funds.
Editor: Kim Taylor
Source: www.bing.com