China May local govt special bond issuance at 452.4b yuan

BEIJING: China's local governments issued 452.4 billion yuan ($70 billion) in special bonds in May, compared with 343.9 billion yuan the previous month, the finance ministry said on Monday.

In the first five months, local governments issued a total of 1.17 trillion yuan in special bonds, the ministry said in a statement on its website.

Local governments issued a net 584 billion yuan in special bonds in January-May, accounting for 16% of the annual quota of 3.65 trillion yuan.

Analysts expect the pace of bond issuance to pick up in the coming months as more spending will be needed to support the economy, which is slowing from a record 18.3% expansion in the first quarter.

Policymakers, while promising to maintain fiscal support for the economy, have cautioned against potential risks caused by rising local government debt, including implicit debt.

Local governments issued bonds, including special bonds, totaling 875.3 billion yuan in May, up from 775.8 billion yuan in April.

Outstanding local government debt was 27.19 trillion yuan at the end of May, the ministry added.