China’s central government is borrowing at the fastest pace on record to finance more spending and to ease the debt burden in provinces, reports Bloomberg. The amount of sovereign bonds sold this quarter, excluding those maturing, reached RMB 277 billion ($40 billion), the highest level for the same period since 1997, when the official ChinaBond website started releasing the data, Bloomberg calculations show.
The gross issuance of the notes in the first three months soared 35% from a year earlier to RMB 2.1 trillion.
In China’s 2023 budget—released earlier this month at the National People’s Congress— Beijing outlined plans to increase the central government’s borrowing by roughly 20% from last year to help finance a slightly bigger fiscal deficit and help provinces deal with increasing financial stress. It also plans to expand investment in infrastructure upgrades such as improving the drainage system in cities.