China to step up local government bond issuance, state media say

BEIJING, Nov. 24 (Reuters) – China will step up the pace of local government special bond issuance under the remaining quota for 2021 to boost investment, the cabinet said on Wednesday, citing state media, as the economy is slowing down.

While controlling local government debt risks, local governments should play a more active role in expanding efficient investments, the cabinet said after a regular meeting.

Local governments should speed up the issuance of special bonds and make efforts to launch new investment projects, he said.

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China this year set an annual quota of 3.6 trillion yuan ($ 571.5 billion) for special bonds from local governments, which primarily finance infrastructure projects.

The finance ministry said local governments aim to meet the annual quota by the end of November.

The Chinese economy is facing further downward pressure, but authorities should avoid deploying economic measures in an “aggressive and campaign-like manner,” Premier Li Keqiang said earlier this week.

The government is expected to propose the local bond quota for 2022 – focusing on key investment projects – at the annual meeting of parliament, which is usually held in March.

($ 1 = 6.3872 Chinese renminbi yuan)

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Reporting by Kevin Yao and the Beijing Newsroom; edited by Emelia Sithole-Matarise

Our Standards: Thomson Reuters Trust Principles.

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