Seven Chinese local governments have announced plans to issue bonds to raise funds for infrastructure projects earlier than normal next year, following Beijing’s call to stimulate the slowing economy.
As of Thursday, local governments in seven provinces and cities across the country, including the provinces of Henan, Sichuan, Zhejiang, Hunan and Shanxi, and the cities of Shenzhen and Qingdao, had all said they will use some of next year’s special-purpose bond quotas in January, earlier than most of the usual schedules, according to Caixin calculations based on documents from government websites and China Central Depositary & Clearing Co. Ltd., one of the country's major clearing houses.
Since the beginning of this year, local governments have been allowed to make early bond issuance. Special-purpose bonds are mostly designated to raise funds for investment in infrastructure such as roads, sewers and public services. Local governments usually use these to fund mid- to long-term infrastructure projects.
The issuance of such bonds is subject to rules set out by Beijing. The seven local governments’ early issuance plans come after China’s Ministry of Finance recently granted local governments to issue special-purpose bonds totaling 1 trillion yuan ($143 billion) early next year, in a bid to speed up the sale of bonds to boost effective investment and increase domestic demand.
Read the full story on Caixin Global later today.
Contact reporter Tang Ziyi (firstname.lastname@example.org)