Five Things to Know About China’s Unused Government Bond Quota as New Stimulus

China is running an all-out infrastructure investment campaign to boost economic growth. With more than 1.4 trillion yuan ($197 billion) already added to policy banks’ investment and lending quotas, it has recently ordered local governments to issue additional special-purpose bonds (SPBs) for an extra stimulus boost.

The economy has been hobbling since the second quarter, faced with incessant Covid-19 outbreaks and record heat waves, which disrupted operations of manufacturing and services hubs across the country. The collapse of confidence in the housing market has also been particularly damaging for local governments, who generate a large part of their revenue from land sales.