China to boost local government special bond issuance

China will accelerate the issuance of local government special bonds, the Ministry of Finance announced in a circular on July 29.

The issuance of new special bonds should be coordinated with that of special bonds for COVID-19 control and general bonds to keep the bond market stable, with the issuance to be completed by the end of October, said the circular.

The maturity of the bonds should be decided in accordance with actual circumstances, according to the document.

Meanwhile, the allocation of the new special bonds should be optimized, the circular said, with the funds used in areas including transport infrastructure, energy projects, agricultural and water conservancy, and environmental protection projects.

The circular strictly forbids using the new special bonds for the replacement of outstanding debt, as well as recurring expenditure, unit operating expenses, payment of pensions, paychecks or interest payments.

Special bonds that have been issued should be put to use properly and in a timely manner, said the circular, while the ministry will keep a close eye on the issuance and use of the bonds to ensure the efficiency and quality of the funded projects.