(Yicai Global) Sept. 4 -- China's local governments issued CNY3.75 trillion (USD548 billion) worth of bonds from January to last month and have invested over half of the proceeds in urban construction and industrial park and transport infrastructure to boost the economy.

Bonds the country's local governments issued from January to last month make up nearly 80 percent of the annual issue quota of CNY4.73 trillion, and the remaining around CNY1 trillion will come out this month and in ensuing ones, figures from leading Chinese financial data provider Wind Information show.

Localities invested the lion's share of these funds in urban construction and industrial park infrastructure to the tune of CNY881.6 billion (USD128.9 billion) in the first seven months, making up about 31 percent of the total, statistics from the Ministry of Finance indicate. Transport infrastructure took the silver with CNY687.9 billion during the same period, making up about 24 percent. Local governments continued to invest most of the money from special bonds in these areas last month.

Regional authorities laid out about CNY619.1 billion of the bond yield on education, science, culture, health and social security from January to July, spent around CNY280.7 billion on poverty relief, relocation for poverty alleviation, agriculture, forestry and water conservancy, while about CNY203.3 billion went to ecological construction and environmental protection.

China's cabinet the State Council used CNY200 billion of the local government special bond funds to supplement the capital of small and medium-sized banks in 18 regions to ameliorate their risks.

The issuance price of local government bonds has been fluctuating from 2015 to this year and hit a nadir of 2.68 percent in October 2016 and an apex of 4.32 percent in February 2018, according to CITIC Securities research unit. The issuance rates of local government bonds have been shrinking since last year as costs have dropped. The average price of local government bonds started to rise in May after a continuous decline since the start of the year and kept rising to 3.53 percent last month.

Local governments accelerated issues of special bonds have greatly revved the economy, the Ministry of Finance has said.

Editor: Ben Armour