Local Government Special Bond Issuance on Track to Soon Breach One Trillion Yuan


China’s local governments are on track to soon bring their issuance of special bonds past the one trillion yuan threshold.

Figures from East Money Information Co. (东方财富) indicate that as of 18 March the local government bond issuance scope had reached 1.351527 trillion yuan in total.

This included 995.271 billion yuan in special bonds and 356.256 billion yuan in normal bonds.

A further 21.26 billion yuan in special bonds are scheduled for issuance on 19 March, bringing total issuance of local government special bonds in 2020 closer to the one trillion yuan threshold.

The total local government bond issuance scope for the period from 19 – 26 March is 144.55 billion yuan.

On 11 February 2020 the Ministry of Finance issued 848 billion yuan in new local bond quotas for the year, including a normal bond quota of 558 billion yuan and special bond quota of 290 billion yuan.

When added to the special bond quota of one trillion yuan issued previously, the move brought the new bond quota for 2020 to 1.848 trillion yuan in total, including 1.29 trillion yuan in special bonds

A meeting of the State Council convened on 17 March called for accelerating the issuance and usage of local government special bonds, and expediting the effective performance of preliminary work on over 4000 key projects that are scheduled to commence in 2020.

Min­istry of Fi­nance data in­di­cates that a to­tal of 4.3624 tril­lion yuan in lo­cal gov­ern­ments were is­sued in 2019, com­prised of: 

  • 3.0561 tril­lion yuan in new bonds,
  • 1.1484 tril­lion yuan in re­fi­nanc­ing fonds, 
  • 157.9 bil­lion yuan in swap bonds. 

New bonds were com­prised of: 

  • 907.4 bil­lion yuan in nor­mal bonds, 
  • 2.1487 tril­lion yuan in spe­cial bonds.

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