According to the data from China’s Ministry of Finance (MOF), as of June 30, local governments in China have issued RMB 2.7869 trillion ($0.4 trillion) of new local government bonds, accounting for 97.9 percent of the MOF’s in-advance issuance of new local government bonds of RMB 2.84 trillion (issued in November 2019 and February 202).
In particular, 32 provinces and regions, including Beijing, Tianjin, the provinces of Hebei and Shanxi, etc., have completed their in-advance issuance of new local government bonds, though Shanghai, Hubei, Hunan and Ningxia provinces have not completed their in-advance issuance of bonds.
In late May, the National People’s Congress (NPC) approved RMB 4.73 trillion of new local government bonds for 2020, according to which 58.9 percent of the issuance of local government bonds for 2020 has been completed by the end of June.
The MOF stated that the maximum issuance of re-financing local government bonds will be RMB 1.83588 trillion. As of June 30, the issuance of re-financing local government bonds amounted to RMB 699.6 billion ($99.1 billion), signaling China has issued around RMB 3.5 trillion ($0.5 trillion) of local government bonds (new local government bonds + re-financing local government bonds).
Following the effective control of the Covid-19 pandemic, China has taken measures to resume production and construction, to boost economic development, with the issuance of local government bonds providing solid support for the resumption of production and construction activities.