(ATF) – The Fujian Provincial Government has issued an advance approval limit of 12.6 billion yuan (US$18b) for additional bonds this year, CCTV in Fuzhou reported.
The news follows Fujian Province’s sale of 48.6 billion yuan of special bonds. Different from the general debt, the newly added debt is mainly to be used in transportation, municipal and industrial park infrastructure, ecological environment protection, water conservancy, education, medical care, pensions and other fields, CCTV reported.
“A modest increase in the scale of local government bonds is conducive to driving economic growth,” an official statement read.
As China’s economy languishes in the doldrums due to the Covid-19 outbreak and a global downturn, government bonds – especially at the local level – are seen as a panacea.
The proceeds are typically earmarked for the construction of key areas identified by the central and provincial party committees and governments, such as ex-situ poverty alleviation and relocation, poverty alleviation, pollution prevention and rural revitalization.
The general bond issuance will be completed before the end of February.