China to speed up the issuance of local gov't bonds
China will increase the issuance of "special-purpose" local government bonds to shore up the real economy while containing risks, according to the Chinese Finance Ministry.
"Special-purpose" bonds refer to bonds earmarked for specific infrastructure projects and could not be used for general expenditure.
Xu Hongcai, assistant minister of the Finance Ministry, told a press conference on Tuesday that the move is to support funding of major infrastructure projects under construction and improve weak links.
By doing so, the country is making its proactive fiscal policy more targeted, to ensure that funding from local government bonds plays a significant role in stabilizing investment and expanding domestic demand, Xu said.
China issued 1.35-trillion-yuan worth special local government bonds in 2018. The amount will be increased substantially in 2019, as instructed by the Central Economic Work Conference held in December.
The exact quota will be determined in March by the National People's Congress (NPC), the country's top legislature. And after the approval of the NPC, the Finance Ministry will strive to complete the issuance of the bonds by the end of September.