China to front-load 2025 local government special bonds quota, report says
BEIJING, CHINA – SEPTEMBER 04: Buildings and vehicles are seen in the central business district during the rush hour on September 4, 2020 in Beijing, China.
Zhang Qiao | Visual China Group | Getty Images
China’s finance ministry is planning to front-load part of the 2025 local government special bonds quota to meet funding needs for major infrastructure projects, state-backed The Securities Times reported on Monday.
The State Council, China’s cabinet, typically determines and issues an advance allocation of new local government debt quotas for the following year in the fourth quarter, depending on economic conditions, the report said.
“At present, the Ministry of Finance is formulating an advance work plan to better ensure the funding needs of major projects in key areas and to leverage the important role of government bond funds in the economic recovery,” it said, without giving specifics.
By the end of October, local governments had issued 3.9 trillion yuan ($539 billion) in new special bonds, almost completing debt issuance under the 2024 quota, the report added.
Data released last week showed factory output growth slowed in October and it was still too early to call a turn in the crisis-hit property sector even though consumers perked up, keeping alive calls for Beijing to top up its recent blitz of stimulus to revitalise the economy.
Earlier this month, China unveiled a 10 trillion yuan debt package to ease local government financing strains and stabilise flagging economic growth, as it faces fresh pressure following the re-election of Donald Trump as U.S. president.
The central bank has also ramped up policy support since late September, cutting interest rates and injecting more cash into the economy to help meet the government’s 2024 growth target of around 5%.
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