The investment arms of China’s cities and provinces are selling debt at a record pace to fund roads, railways, utilities and ports, as they seek to shore up growth by spending more on infrastructure, reported the Wall Street Journal.
Local government financing vehicles have issued RMB 2.37 trillion ($332 billion) of domestic bonds this year. That total is up 38% from the same period in 2018, and is poised to break the full-year record of RMB 2.56 trillion set three years ago. Overseas issuance in dollars has hit $23 billion: up 56% year-over-year, and nearing 2018’s full-year record of $24 billion.
Smaller cities and counties in China have long used local government financing vehicles to raise money via debt that is kept off the books of the municipalities themselves, said the WSJ.