China’s Ministry of Finance has indicated that it will accelerate the process of issuing debt quotas to the country’s local governments.
The “Notice Concerning Strengthening of Local Budget Implementation Management and Acceleration of Payment Schedules” (关于加强地方预算执行管理 加快支出进度的通知) issued by MOF last week seeks to strengthen overall coordination of the issuance of local government bonds and treasury management, as well as accelerate the schedule for the issuance of local government debt quotas.
The Notice also requires the acceleration of the issuance of transfer payment budgets, and the “firm and refined” allocation of budgets to departments and lower level finance departments at the start and end of the year.
Province-level finance departments must undertake various work preparations in advance, and after receiving the region-based local government debt quotas as approved by the State Council, apply for and complete statuary examination and approval procedures as quickly as possible for the government debt of that region, for acceleration of the issuance of local government debt quotas.
Province-level finance departments are also called upon to set a rational timeframe and pace for the issuance of bonds, following comprehensive consideration of funding needs, maturing debt, the treasury scale and conditions on the bond market.
Following the issuance of bonds for debt swaps, finance departments at all levels are called upon to firmly grasp the volume of debt for swapping, and reduce the amount of time that funds remain in the national treasury.
A senior official from MOF said that finance departments at all levels must engage in the organic integration of the accelerated implementation of budgets, increased efficiency of fund usage, and ensuring the security of funds, as well as resolutely eradicate “allocations as payments” and misappropriation of funds.