Local governments in China have completed issuance of most of the RMB 3.75 trillion ($560 billion) of special government bonds planned for the year to fund infrastructure investment and support the revival of the virus-hit economy, according to the Ministry of Finance, reported Caixin.
By the end of October, 94.6% of the planned issuance of special-purpose bonds was completed, finance ministry data showed. New government borrowing totaled RMB 4.49 trillion. Special-purpose bonds provide an off-budget source of financing for local government projects and are meant to be repaid from income generated by the projects they invest in.
To help the economy rebound from the pandemic, the central government authorized local authorities to borrow 74.4% more via special bond issuance than last year, increasing the allotment to RMB 3.75 trillion for 2020 from RMB 2.15 trillion in 2019.