China's Local Govt Bond Sales May Hit Three-Year Peak of CNY900 Billion in June
Chen Yikan | Lin Xiaozhao
DATE:  Jun 24 2019
/ SOURCE:  yicai
China's Local Govt Bond Sales May Hit Three-Year Peak of CNY900 Billion in June China's Local Govt Bond Sales May Hit Three-Year Peak of CNY900 Billion in June

(Yicai Global) June 24 -- Local government bond issues may reach a three-year high this month as China's regional authorities conduct their biggest monthly bond sales of the year so far to buoy economic growth.

The authorities plan to issue almost CNY900 billion (USD130.9 billion) of local government bonds in June, according to data provider Wind Info. So far this month, they have issued CNY594.2 billion and plan to launch debt sales worth CNY305.4 billion before July.

The funds raised will go to finance new government-led infrastructure and technology projects, including for fifth-generation wireless networks, artificial intelligence and the Internet of Things.

The total amount of new bonds will hit CNY3 trillion by October, so June's large offers fit the bigger picture, Mao Jie, a professor at Beijing's University of International Business and Economics, told Yicai Global.

China issued CNY1.9 trillion (USD276 billion) of local government bonds from January to May, of which new bonds made up CNY1.5 trillion, nearly half of a CNY3.1 trillion goal, according to the finance ministry.

Guangdong province's fixed asset investment from January to April jumped 11 percent from the previous year, according to its statistics bureau. The rate was 0.5 percentage point faster than in 2018. As of June 17, the Guangdong-Hong Kong-Macau Greater Bay Area had kicked off 30 major projects worth CNY39.1 billion. 

Southwestern Guizhou province plans to initiate over 160 major private investment projects totaling CNY151.5 billion, according to the local development and reform commission. These projects may draw in private capital of CNY124.6 billion. 

The Guangzhou Airport Economic Demonstration Zone had penned 26 major project agreements worth CNY30 billion, as of June 18.

As of May 27, the tech hub of Shenzhen had started more than 110 new projects in the second quarter with a value of CNY123.2 billion. The city plans to complete total investment of CNY20.2 billion this year.

Editor: Liao Shumin, Emmi Laine

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Keywords:   Local Government Bond,Infrastructure Projects