BEIJING/SHANGHAI: China plans to begin issuing new local government bonds for 2019 in January, earlier than usual, two sources with knowledge of the matter told Reuters on Monday, as the authorities try to counter slowing growth worsened by the Sino-US trade war.
Local government bond issuance typically begins in March, following the approval of quotas at the National People’s Congress, or annual meeting of the nation’s parliament. But a source said a plan to advance issuance in 2019 could be passed at a meeting of the standing committee of the NPC next week.
The source said local government bond issuance is likely to be stepped up next year, but that the pace of issuance would be smoothed out compared with 2018.
China’s local governments nearly exhausted annual quotas for new debt issuance in the first 10 months of the year as the central government sought to combat slowing infrastructure investment to boost growth.
Bond sales picked up sharply in the third quarter partly due to a crackdown on illegal financing channels such as shadow banking.
The finance ministry did not immediately respond to requests for comment.
Local governments have issued bonds worth a total of 4.1 trillion yuan ($594.21 billion) so far in 2018, according to data from the website of the China Central Depository and Clearing Co, China’s primary bond clearing house.