Bloomberg News:

What is the reason for the slow issuance of local special bonds since the beginning of this year? And when is the issuance expected to speed up? Thank you. 

Wang Jianfan:

In order to implement the decisions and deployments of the CPC Central Committee and the State Council, actively play the role of local government bonds, stimulate effective investment and promote steady economic recovery and growth, in December 2023, the MOF performed approval procedures in accordance with the law and approved part of the 2024 quota for local government special bonds in advance.

In 2024, the MOF will work with related departments to continuously improve and adjust the investment areas of local government special bonds and the scope of project capital. We will include more fields of new energy, new infrastructure and new industries for investment in local government special bonds. We will issue bonds to support independent new-type energy storage and the comprehensive treatment of water environments in key river basins; guide local governments to provide more support for areas including infrastructure of national industrial parks, integrated application of 5G technologies, urban village renovation, construction and supply of government-subsidized housing and college dormitories; further plan major projects that deliver significant socio-economic benefits, have a strong driving effect, are wanted by the people, and need to be implemented. We will allow the use of local government special bonds as project capital for government-subsidized housing to help the bonds play their leveraging role. Meanwhile, we will guide local governments to strengthen project reserve, focusing on key investment areas identified by the CPC Central Committee and the State Council, and strictly implement the list of prohibited items. We have worked with related departments to ask local governments to submit their demands for new special bond projects in 2024. Currently, the MOF has been strengthening the review of projects from the aspects of project maturity, balance of financing and revenues, and fund use compliance to improve the quality of project reserves. 

In the first quarter of 2024, all localities issued special bonds within the limit of the 2024 quota for local government special bonds approved in advance, mainly for the construction of projects in key areas identified by the CPC Central Committee and the State Council, such as municipal construction, industrial park infrastructure, social programs, transportation infrastructure and government-subsidized housing projects. Special bonds have played a positive role in strengthening the economic foundation, shoring up weak links, improving people's lives and expanding investment. The issuance scale of special bonds in the first four months was smaller than the same period in previous years. This is due to two factors. On one hand, the scale of issuances at the beginning of previous years was expanded to cope with the impact of special factors such as the COVID-19 pandemic. On the other hand, it is also related to demand for local project construction funds, conditions for construction in winter and spring, bond market interest rates and other factors. At the same time, we have also done a lot of work to improve the quality of special bond projects and strengthen the preliminary preparations of projects. Overall, the issuance scale for the whole year is still in line with expectations.

Next, the MOF will work with related departments to guide local governments to issue special bonds at the right pace, optimize the pace and scale of government investment, guide and ensure the funding demand of major projects, use special bonds more efficiently, give full play to the driving and amplifying effect of government investment, consolidate and build momentum for economic recovery and growth, and continue to effectively pursue higher-quality economic growth and appropriately increase economic output. Thank you.