Beijing to issue 10.5b yuan in municipal government debt
Beijing plans to issue 10.5 billion yuan (HK$13.2 billion) in municipal government debt on August 21 to finance projects including infrastructure works.
The move is part of a trial launched by the Ministry of Finance to allow 10 local governments, including Beijing, Shanghai and Shandong province, to issue and repay bonds on their own in a bid to broaden their financing channels.
Most local authorities, restricted by law to issue debt directly but facing robust investment demand, have sidestepped the policy to borrow money through their financing arms. This trend has created financial risks.
The trial is aimed at making local governments more accountable for their debt to improve transparency.
According to the Beijing Municipal Bureau of Finance, the fixed-rate municipal bonds will be issued in three tranches on five, seven and 10-year terms.
The funds raised would be used to invest in social housing, transport infrastructure, and resources and environmental projects, among others, the bureau said in a statement.