China’s local authorities eye ‘window of opportunity’ to claim slice of sovereign bond pie

21st Century Business Herald reported that regional authorities in China are seeking funding for food, energy and supply chain security projects

In October, China’s legislature approved the issuance of 1 trillion yuan (US$140 billion) of sovereign bonds to fund disaster prevention, relief and reconstruction efforts

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Beijing has vowed to further its proactive fiscal policies in 2024 to stabilise and shore up the economy. Photo: Bloomberg

Published: 8:30pm, 11 Jan 2024

Regional authorities in China are reserving projects to be funded by special treasury bonds, having been told by Beijing to shoulder the responsibility for economic stabilisation.

The proposals are mainly concerned with food, energy and supply chain security, as well as urbanisation and rural revitalisation strategies, the Guangzhou-based 21st Century Business Herald reported on Wednesday, citing several unidentified sources.

The newspaper did not say whether the bonds are part of a new batch of bonds, or are included in the 1 trillion yuan (US$140 billion) issuance of sovereign bonds approved by China’s legislature in October.

At the time, officials said the bonds approved in October were earmarked for supporting reconstruction and improving disaster prevention and relief capabilities.

However, the investment areas proposed by the regional authorities, according to the newspaper, are in line with the priorities outlined at the tone-setting central economic work conference last month.

Beijing is widely expected to take more responsibility over expenditure this year, as local governments reported falling tax revenues and income from land sales, adding to their ongoing debt problems.

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