(Yicai) Dec. 26 -- In the first 11 months of the year, Chinese local governments have issued bonds worth 24 percent more than a year earlier, partly thanks to the rapid increase of refinancing debt issuance by some of them, according to the latest official data.

China issued CNY9.14 trillion (USD1.3 trillion) worth of local government bonds in the 11 months ended Nov. 30, data released yesterday by the Ministry of Finance showed. Among them, CNY4.55 trillion were new bonds, which usually fund local infrastructure projects, and CNY4.60 trillion were refinancing bonds, which are used to repay the principal of maturing government bonds.

Guangdong and Shandong provinces issued CNY681.6 billion and CNY606.1 billion (USD95.4 billion and USD84.9 billion) debts, respectively, continuing to stay far ahead of other provincial-level regions, according to the MOF data. Jiangsu, Zhejiang, Sichuan, and Hebei provinces also remained among the top issuers.

The above provincial-level regions have developed economies, great financial strengths, and low debt risks, so they usually obtain large quotas to issue new and refinancing bonds.

Tianjin, Inner Mongolia Autonomous Region, and Guizhou province were the three provincial-level regions with the highest local government bond issuance increase in the first 11 months of the year from a year earlier. Their growth reached 138 percent, 111 percent, and 93 percent, respectively, the MOF data also showed.

The reason behind these strong growth rates is that Tianjin, Inner Mongolia, and Guizhou obtained high special refinancing bond quotas from the central government, in order to help these regional governments to repay their maturing debt to mitigate potential financial difficulties. 

Guizhou received the highest amount of CNY226.4 billion, followed by Tianjin at CNY128.6 billion. Inner Mongolia got CNY106.7 billion, the fifth-largest amount.

The local government bond issuance in the first 11 months of the year of Liaoning, Hunan, Anhui, Yunnan, and Jilin provinces and Guangxi Zhuang Autonomous Region, which also received high special bond issuance quotas, were all over 50 percent higher than in the same period last year.

Hunan issued CNY468 billion of local government bonds between January and November, ranking third among all Chinese provincial-level regions, compared with 10th a year earlier, mainly because it issued nearly CNY300 billion worth of refinancing bonds, almost three times the figure from a year ago, according to MOF data.

Anhui ranked fifth by issuing CNY448.3 billion worth of local government bonds in the first 11 months of the year, thanks to the amount of refinancing bonds issued in the period, which was nearly four times that of a year earlier, data from the MOF also showed.

The MOF is expected to disclose the first batch of local government bond issuance quotas for next year in advance this week, with an estimated scale of CNY2 trillion, according to experts. Some provincial-level regions have already begun to unveil their bond issuance plans for the first quarter of next year.

Editors: Tang Shihua, Futura Costaglione