The Haikou part of the G15 highway in South China's Hainan Province, which is still under construction, is seen on September 14, 2022. Photo: cnsphoto

China issued a total of 390.9 billion yuan ($54.93 billion) worth of local government bonds in August, with the total amount from January to August  in 2022 reaching 6.05 trillion yuan ($850.2 billion), statistics from the Ministry of Finance (MOF) revealed on Saturday. 

Among the 390.9 billion yuan in August, general bonds made up 176 billion yuan and special bonds stood at 214.9 billion yuan. In the first eight months, the issuance of general bonds totaled 1.76 trillion yuan and that of special bonds totaled 4.29 trillion yuan. 

Local government bonds are usually used to finance local public works, including transport, communications, housing, and other sectors.

Special bonds are a significant financial source for local infrastructure construction. As of September 21, a total of 11 provinces and cities across the country have made public their plans to issue local government bonds in the fourth quarter or October, with a total of 234.3 billion yuan in special bonds to be issued, media outlet yicai.com reported on Friday. 

As the nation's economy faces challenges from the COVID-19 pandemic and weakened overseas demands, the central government aims to increase the issuance of local government bonds to stimulate economic growth while gradually transferring the momentum of the stimulus to local governments for greater dynamism, Dong Dengxin, director of the Finance and Securities Institute of the Wuhan University of Science and Technology, told the Global Times on Saturday.

Dong added that since economic development from region to region is uneven, the issuance of local government bonds can drive local economic development in a targeted manner.

Special bonds play an important role in expanding effective investment and stabilizing the macro economy in general, Song Qichao, head of the budget department of the MOF said, the Xinhua News Agency reported in July.

Song noted that the already issued special bonds in the first half of 2022 have supported more than 23,800 projects, of which about 10,800 were under construction and 13,000 were new projects. 

Chinese Premier Li Keqiang vowed to implement concrete measures to ensure the country's economy operates within a reasonable range in the fourth quarter at a meeting to further stabilize the economy on September 28, which sought to advance the issuance of partial quota for next year's special bonds ahead of schedule in accordance with the law and regulations, according to Xinhua. 

Global Times