Bonds Mar 23

China has issued $201bn of local government recovery bonds 

Regions and cities already sold 76% of annual allocation as part of virus damage-limitation programme

by Xu Yuenai
Infrastructure projects, such as railways, attract lion share of funds.  

(ATF) – China has issued 1.41 trillion yuan (about US$ 201.1 billion) of new local government bonds this year as cities and provinces raise funds to fight the coronavirus and rebuild their economies.

Issuance in the first three months account for 76% of the quota issued in advance. Special bonds sales reached 1 trillion yuan, accounting for 79%, according to the latest figures released by the Ministry of Finance.

These special debts are all used for the construction of railway, rail transit and other transport facilities, as well as major infrastructure projects in the fields of ecological and environmental protection, agriculture, forestry and water conservancy, municipal and industrial parks, the figures showed.

At the same time, the scale of capital bonds used by various localities for qualified major projects has reached 120 billion yuan, and are targeted at driving considerable social capital and expanding effective investment.

Huachuang Securities pointed out that recently, as the resumption rate of key projects continues to rise, analysts believe that China's economic recovery in the second quarter may exceed expectations.

Wu Yaping, director of the Investment Research Institute of the National Development and Reform Commission, said that "it is even possible to reach 6.5 % and 7 %" growth.