China local governments speed up special bond issues

BEIJING: China’s local governments issued a net 439.9 billion yuan (US$61.59bil or RM277.4bil) in special bonds in October, according to the finance ministry yesterday, as policymakers strive to fund infrastructure projects to shore up the slowing economy.

The issuance far surpassed the 24.1 billion yuan (RM15bil) in special bond issuance in September and 51.6 billion yuan (RM32.4bil) in August, as the Cabinet asked local governments to complete selling more than 500 billion yuan (RM314bil) in special bonds under carryover quotas by the end of October.

In the first 10 months, local governments issued a net 3.98 trillion yuan (RM2.5 trillion) in special bonds, according to data from the ministry.

As domestic consumption and external demand weakens, Chinese policymakers are doubling down on an infrastructure push, dusting off an old playbook by issuing debt to pay for big public works projects to revive the economy.

But analysts say persistent and widespread Covid restrictions subdued any meaningful economic rebound.

According to an official survey yesterday, China’s factory and services activity both fell to seven-month lows in November.

Already under pressure from a property slump and softening global demand for Chinese goods, the world’s second-biggest economy sees mounting challenges as fresh anti-virus curbs added to concerns about growth in the last quarter of this year. — Reuters

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China , governments , bonds , infrastructure


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