China’s local governments have flooded the market with RMB 1.2 trillion ($179 billion) in bond issuance during the first three months of the year, in another sign of how Beijing is trying to kick-start economic growth with infrastructure spending, said the Financial Times.
Over the past two years, there was no local bond issuance during the first quarter, according to data from Moody’s, showing a dramatic shift in how Beijing is allowing smaller governments to raise debt, reported the Financial Times.
“Regional and local governments can now use bond proceeds earlier, reducing their near-term reliance on land sale revenue and off-balance-sheet financing through local state-owned enterprises, particularly local government financing vehicles,” Moody’s said in a report, adding that the value of local government bond issuance was likely to hit RMB 3.7 trillion this year, or about 70% higher than last year.
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