BEIJING, CHINA – SEPTEMBER 4: Buildings and vehicles are visible in the central business district of Beijing, China, during rush hour on September 4, 2020.
Zhang Qiao|Visual China Group|Getty Images
China’s Ministry of Finance plans to allocate part of its 2025 local government project bond quota in advance to meet funding needs for major infrastructure projects, the state-backed Securities Times reported on Monday.
China’s State Council usually determines and issues a pre-allocation of new local government debt quotas for the next year in the fourth quarter based on economic conditions, the report said.
Currently, the Ministry of Finance is formulating a preliminary work plan to better ensure the funding needs of major projects in key areas and give full play to the important role of national debt funds in economic recovery.
As of the end of October, local governments had issued 3.9 trillion yuan ($539 billion) of new special bonds, almost completing debt issuance under the 2024 quota, the report added.
Data released last week showed factory output growth slowed in October, and while consumers were in high spirits, it was too early to judge a turnaround in the crisis-hit real estate sector, calling for Beijing to step up recent stimulus measures to revive the economy. The voice is still rising.
Earlier this month, China, facing new pressure after Donald Trump was re-elected as U.S. president, launched a 10 trillion yuan debt package to ease financing pressure on local governments and stabilize sluggish economic growth.
The central bank has also stepped up policy support since the end of September, lowering interest rates and injecting more cash into the economy to help achieve the government’s growth target of around 5% in 2024.
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