China’s local governments issued a record high volume of bonds in the month of May, amidst ongoing efforts by regulators to keep the economy afloat in the wake of the COVID-19 pandemic.
Figures from market data provider Wind indicate that China’s local governments issued 1.3 trillion yuan (approx. USD$182.6 billion) in bonds in May, blowing past the previous single-month high of 1.06 trillion yuan in April 2016.
A total of 998 billion yuan in new special bonds were issued in May, after a regular meeting of the State Council convened on 6 May said that it would provide up to 1 trillion yuan in new special bond quotas in advance, and push for the completion of issuance by the end of the month.
This followed the issuance of 1.29 trillion yuan in local government special bonds at the start of 2020.
Wind data further indicates that a total of 3.2 trillion yuan in local government bonds were issued during the period from January to May, including 2.7 trillion yuan in new local government bonds.
The 2020 Government Work Report outlines a full year quota of 4.73 trillion yuan in new local government bonds, leaving room for further issuance of 2 trillion yuan prior to the end of the year.