China local government bonds popularBusiness | Tereza Cai 24 Jan 2019
The total amount of newly issued local government bonds this year as of January 22 reached as much as 250.47 billion yuan (HK$289.58 billion), which was popular with mainland investors, mainland media reported.
Henan province recorded 48.6 times of oversubscription on its local government bonds worth 45.32 billion yuan on Tuesday.
Xinjiang, an autonomous territory in northwest China, took a lead this year to issue the first batch of 10 billion yuan local government bonds on Monday.
The Ministry of Finance posted that the fiscal income for 2018 saw an increase of 6.2 percent, while the expenditure was up 8.7 percent.
The gap obviously widened, as it recorded 7.4 percent growth in fiscal income, and 7.7 percent rise in fiscal expenditure in 2017.
It expects government income growth to slow down this year and local government to bid to complete the issue of special bonds by the end of September.
Local government debt ratio was 76.6 percent at the end of 2018, lower than the international level, while slightly higher than the end of 2017 at 76.5 percent.
Meanwhile, China will step up fiscal spending this year to support its economy, focusing on further cuts in taxes and fees for small firms, finance ministry officials said on Wednesday.
Onshore yuan CNY rose 215 points yesterday at market closing.
Goldman Sachs expects China will roll out overall easing policies including monetary, fiscal and property policies in the next six to nine months and the central bank to cut the reserve requirement ratio once each quarter this year.
Kinger Lau, the chief China equity strategist in macro research, predicts a 50 percent chance China and the US will form a short-term agreement and China economic growth will drop 0.4 percent.