Provinces get more funding support from 1-trillion yuan in special treasury bonds

An aerial drone photo taken on April 28, 2024 shows the construction site of Zangke River bridge on Nayong-Qinglong Expressway in southwest China's Guizhou Province. The closure of the bridge, featuring a length of 1,849 meters and a span of 1,080 meters, has been successfully completed on Sunday. (Photo: Xinhua)

Of the 15,000 projects to be financed by the 1 trillion yuan ($138.4 billion) of the government's special treasury bonds, 11,000 have begun construction, with a start rate of 72 percent, China Media Group (CMG) reported on Sunday.

Hu He, an official at the National Development and Reform Commission (NDRC), the country's top economic planning agency, told CMG that the remaining projects will be launched before the end of June this year.

"Projects in the fields of post-flooding rehabilitation and upgrading of disaster prevention and mitigation capacity had the highest start rate of 90 percent," Hu said. China encountered heavy rainfall and flooding in the summer time last year.

A number of schools, hospitals, roads, water supply facilities and other post-disaster reconstruction projects are soon to be completed or will be put into operation before this year's raining season, Hu noted.

The central government announced in October the issuance of 1 trillion yuan in additional government bonds, covering post-disaster rehabilitation and building new projects. In March, the NDRC said that it had allocated all the funds raised through the issuance of special government bonds.

"As the government bonds are earmarked for the implementation of major strategies and the building of security capacity in key areas, the issuance of such bonds means the government is able to provide a stable source of funding for those major projects," Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, told the Global Times on Sunday.

The issuance of treasury bonds will also help optimize the debt structure of local governments and reduce their debt risks, Wang noted.

According to the CMG, the additional 1 trillion yuan of treasury bonds are allocated for local use through transfer payments. That is to say, the bonds are included in the central fiscal deficit, without increasing the burden of local governments.

During this year's "two sessions" in March, the policymakers said that the government will issue ultra-long special-purpose treasury bonds in 2024 and in each of the next several years. This year, 1 trillion yuan of such bonds will be issued.

China issued the first batch of the ultra-long-term treasury bonds starting from Friday, as the authorities stepped up efforts to finance crucial projects to ensure high-quality economic development in 2024.

The issuance of ultra-long-term special treasury bonds is expected to boost market confidence and public expectations about sustainable economic growth, Wang noted.

On Friday, the country published the latest economic indicators for April. Industrial production jumped by 6.7 percent year-on-year and retail sales gained 2.3 percent. Fixed-asset investment rose by 4.2 percent in the first four months.

"All figures showed that, with the increased activity in industrial production and rising market confidence, the Chinese economy is steadily gaining pace," Wang said.