Bonds Mar 04

Finance Ministry reveals issuance for early 2020

$1.75 trillion in local government bonds issued; total national government debt near $32 trillion

by Chris Gill
MOFG issues govt borrowing figures for 2020
The Chinese government issued $1.75 trillion worth of local government bonds in January and February 2020. Photo: AFP 

(ATF) – The Chinese government issued 437.9 billion yuan (US$62.7 billion) of local government bonds in February, according to information on the Ministry of Finance website. 

Of this, 202.9 billion yuan ($29.6 billion) were issued for new general bonds, and 235 billion yuan ($33.7 billion) were issued as new special bonds, according to state media.

The special bonds are being issued for economic stimulus to counter the impact of the Covid-19 epidemic and other economic slowdown issues.

The average maturity of these local government bonds was 17.5 years – 18.2 years for general bonds and 17 years for special bonds.

The average issuance rate of local government bonds was 3.34% – 3.35% for general bonds and 3.33% for special bonds.

From January to February this year, some 12,223 billion yuan ($1.75 trillion) in local government bonds were issued.

Of this, general bonds worth 273.2 billion yuan ($39.13 billion) were issued along with special bonds totalling 949.8 billion yuan ($136 billion); all were newly increased.

The average issuance period of local government bonds for the two months was 15.2 years – 17.5 years for general bonds and 14.5 years for special bonds. The average issuance rate was 3.44% – 3.39% for general bonds and 3.46% for special bonds.

No local government bonds matured in January to February 2020. In this period, local government bonds paid interest of 52.9 billion yuan (US$7.6 billion), with interest of 29.7 billion yuan ($4.3 billion) paid in February.

National debt near $32 trillion

As of the end of February 2020, the national government debt balance was 222.5 trillion yuan ($31.9 trillion). 

Of this, general debt was 1.2 trillion yuan ($174 billion), special debt was 10.4 trillion yuan ($1.5 trillion); government bonds were 22.4 trillion yuan ($3.2 trillion), and non-government bonds in the form of government debt were 188.9 billion yuan ($27 billion).

As of the end of February, the average remaining life of local government bonds is 5.4 years – 5 years for general bonds and 5.8 years for special bonds. The average interest rate was 3.54% – 3.54% for general bonds and 3.53% for special bonds.