China’s bonds issued by local governments amounted to RMB 384.4 billion in January this year, down 38.6 percent year on year, including new bonds worth RMB 175.4 billion ($24.7 billion), as reported by local financial media.
In addition, local development and reform commissions in some provinces have divided government investment projects into three categories to strengthen management, namely, a strictly prohibited category, a supporting security category and an upgrading approval category.
Accordingly, local governments will prudently use government funds, which will have a negative impact on local entities involved in infrastructure project construction in the short term.