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China accelerates 1t yuan bond sale to boost economy
[BEIJING] China has ordered local governments to speed up the issuance of debt earmarked for infrastructure projects, so that the proceeds can be invested early in 2020 to help shore up the slowing economy.
All localities are required to allocate the recently issued "special bond" quota of 1 trillion yuan (S$194 billion) "as soon as possible" to specific projects, the Ministry of Finance said in a statement late Wednesday. There were no details on when the sales will actually begin, or what the total quota for 2020 will be.
Until this year, sales of the bonds began in March, after the legislature formally approved the annual budget. In 2019, bond issuance began in January so that the money could be spent earlier and faster on infrastructure projects to boost demand. The announcement on Wednesday shows that the government is trying to jump-start that process even earlier next year.
The decision indicates a willingness among policy makers to inject more stimulus into the economy, according to a note from Bloomberg economist Qian Wan.
"The front loading of special bond issuance will also ensure funding for infrastructure projects at the beginning of next year" and the size suggest the quote may exceed the 2.15 trillion yuan one this year, she wrote.