China Rushing to Pump Local Debt into Economy

I didn't buy the China recovery/stimulus narrative. Earlier this month, I posted two articles about quicker borrowing.

The first was Ahead of Schedule: Chinese Provinces Finalize Bond Issuance Plans for 2020

The second was China 2020: Leverage Up With More Special Debt and RRR Cuts. I commented, speculatively:
As the prior post showed, local governments and provinces have already finalized 2020 bond issuance plans that are typically finished in October and November. There is a need to pull 2020 GDP in 2019 to hit targets.
There wasn't an official signal that spending could commence early, but now some officials are saying the process can start in Q4:

Caixin: Local Governments Urged to Rush Bond Plans Amid Fresh Signs of Slowdown
Some officials and analysts believe that China could allow local governments to dip into next year’s quotas as soon as this year’s fourth quarter.

Earlier this month, the State Council, China’s cabinet, said that the country will allow early use of next year’s quotas for new special-purpose bonds, without specifying just how early.

In December, China’s top legislature passed a bill allowing local governments to use part of their annual bond quotas earlier than usual. According to the bill, effective from 2019 to 2022, local governments can start issuing new debt as early as the first quarter of each year. Previously, many local governments could not tap into their bond quotas until the second quarter — or even the second half — of each year, because the legislature generally didn’t approve a full-year national quota until March.
There's no word if construction could start early, but assuming local governments obtain funding early and have a need to paint rosier GDP numbers in the immediate future...

The article says 93 percent of the 2019 borrowing quota was issued by end of August. If they start borrowing two or three months early, next year's quotas might be exhausted by June or July. If China is in a protracted slowdown, growth is going to hit a wall early in 2020 or they'll abandon their deleveraging efforts. If the U.S. dollar remains strong, currency pressure will build. Eventually, they will let the yuan find its market price.

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