(Yicai) Sept. 3 -- Chinese local governments are stepping up the pace of bond issuance. Sales were about 67 percent higher in August compared with the previous month, with the quicker pace intended to boost economic growth through higher investment.

Local authorities issued CNY1.2 trillion (USD168.5 billion) of bonds last month, versus CNY718 billion (USD100.9 billion) in July, Yicai calculated based on publicly available data.

After a slow pace of issuance in the first half of the year, sales have accelerated since June to speed up investment and maximize the impact on this year’s economic growth, Wen Bin, chief economist at China Minsheng Bank, told Yicai.

In the first eight months of the year, local government bond sales fell 14 percent to CNY5.4 trillion from the same period of last year, of which CNY2.3 trillion were refinancing bonds and CNY3.1 trillion were new bonds.

Refinancing bonds are mainly used to repay existing debt, while new bonds are mostly used to fund big infrastructure and livelihood projects. The issuance of such bonds can boost local economies by funding projects that create jobs and stimulate economic activity.

Of the CNY3.1 trillion in new bonds, about CNY2.6 trillion were special bonds, which are issued to raise funds for revenue-generating projects that can repay the debt on their own. The remaining CNY500 billion were general bonds used for public welfare projects with no investment returns.

About a third of the CNY2.6 trillion in special bonds that local governments issued in the eight months ended Aug. 31 went on municipal and industrial park infrastructure, while 20 percent went on transport infrastructure such as railroads and toll roads, according to data from enterprise risk monitoring and pre-warning platform Enterprise Pre-Warning.

Of the remaining special bonds, about 8 percent were used for rural village renovation, 7 percent for medical and health projects, and 6 percent for agriculture, forestry, and water conservancy projects, Enterprise Pre-Warning’s data also showed.

Editors: Tang Shihua, Futura Costaglione