(Yicai Global) April 26 -- China’s local governments issued CNY2.1 trillion (USD292.4 billion) in bonds in the first quarter, up around 16 percent from a year ago, showing their efforts to implement proactive fiscal policies and steady economic growth, the finance ministry said today.

Shandong issued bonds worth CNY193.2 billion (USD28 billion), the most among the country’s 31 provinces, followed by Guangdong with CNY162.4 billion and Sichuan with CNY159.3 billion. Jiangsu, Hebei and Fujian each sold more than CNY100 billion, while Zhejiang, Hubei, Yunnan, Anhui and Jiangxi issued between CNY80 billion and CNY100 billion.

The top seven provinces in terms of bond issuance were all in East China except for Sichuan, because eastern provinces have stronger economic capacity and better financial conditions and thus higher bond issuance quotas from the ministry.

The CNY2.1 trillion included CNY1.7 trillion in new bonds and CNY440.3 billion in refinancing for expired debts, finance ministry data showed.

The new bonds include CNY1.4 trillion in special-purpose bonds for investing in public welfare projects which have reliable returns and can repay principal and interest, as well as CNY312.6 billion in general bonds for normal local government expenditure.

The annual meeting of the National People’s Congress set a quota of CNY3.8 trillion for new special-purpose bonds this year, up CNY150 billion on last year. Issuance of CNY2.2 trillion of the quota was allowed to start at the end of last year, ahead of schedule, as provinces dealt with the economic fallout from the pandemic.

New special-purpose local governments bonds issued in the three months ended March 31 were equivalent to 62 percent of the CNY2.2 trillion quota given to provinces at the end of last year.

As provinces have already released their new bond plans for the second quarter, the issuance of this year’s CNY3.8 trillion quota for new special-purpose bonds will be finished in the first three quarters, ahead of schedule again. The money will probably be used in key infrastructure projects as soon as possible to shore up the economic recovery, experts told Yicai Global.

Editors: Tang Shihua, Tom Litting