2020-02-13

China Local Govt Bond Issuance May Peak in March

Coming into 2020 I was looking for front-loaded growth in China. Now they're trying to overload growth in the first-half because of the coronavirus slowdown. If it fails, China's in deep trouble because it means the coronavirus situation gets much worse. If they succeed, deleveraging will be more difficult in 2021. Adding to the risk, the Federal Reserve has stimulated the U.S. stock market since October.

21st Century: 财政政策加码稳增长 3月或迎来地方债发行高峰
On February 11, the Ministry of Finance announced that in order to implement the decision-making and deployment of the Party Central Committee and the State Council, and to speed up the progress of the issuance and use of local government bonds, the State Council decided and reported to the Standing Committee of the National People's Congress for the record. The local government debt limit was increased by 848 billion yuan, of which the general debt limit was 558 billion yuan and the special debt limit was 290 billion yuan. In addition to the previous special debt of 1 trillion yuan issued in advance, a total of 4.8 trillion yuan in local government debt in 2020 was added in advance.

"From the policy itself, the quota is still within the framework of the original policy. But the two batches are obviously a manifestation of fiscal leeway. Under the impact of the current pneumonia epidemic of new coronavirus infection, To further strengthen the financial strength, naturally take the former back-seller out first. "Sun Binbin, chief solid income analyst at Tianfeng Securities, said.

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