Local Gov'ts to Issue 250 Bln Yuan in Bonds
(Beijing) – China's local governments plan to issue a total of 250 billion yuan worth of local bonds this year, an increase of around 50 billion yuan compared to previous years, Caixin confirmed with local and central government regulators.
A source from the Jiangxi provincial government's Department of Finance told Caixin that the Ministry of Finance has set a quota of 250 billion yuan for this year's local government bond issuance. The source added that Jiangxi Province has already submitted applications for bond issuances to the ministry.
A large portion of local bonds issued just after the financial crisis are set to mature this year and many local governments are now eyeing new bond issuances for further financing.
In 2011, the central government approved a pilot program to allow direct bond issuances by four local governments. Previously, all local bond issuances were implemented by the Ministry of Finance on behalf of local governments. From 2009 to 2011, bond issuances for local governments totaled 200 billion yuan every year.
Study Times, a local business paper, said while steady progress has been made in the pilot program so far, stronger oversight mechanisms over local government debt management are needed.
A market analyst said that the program of direct local bond issuances is expected to be expanded to around 10 provinces this year, in mainly eastern coastal areas.
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