In the first quarter, nearly 90% of the “early approval” quota for the issuance of new special bonds has been completed, reflecting the steady growth of the proactive fiscal policy. Looking forward to the second quarter, experts believe that the pace of local bond issuance will continue to show an accelerated trend, and more infrastructure projects will start construction in a timely manner with the support of special debt funds, which is expected to play a key role in the stabilization and recovery of the economy in the second quarter.
The issuance of local government bonds increased in the first quarter
On the last day of March, there was no “idle” in the issuance of local government bonds in various places. According to statistics, a total of 54.6 billion yuan of local bonds were issued on that day, including 51.6 billion yuan of new special bonds, accounting for about 12% of the total issuance in March. The distribution work has come to an end.
Compared with the same period last year, the issuance of local government bonds in the first quarter of this year increased significantly. Wind data shows that in the first quarter of this year, a total of 1,824.6 billion yuan of local government bonds were issued, more than double the amount issued in the same period last year. Among them, the new issuance of special bonds was 1,298.1 billion yuan, accounting for about 89% of this year’s “early approval” quota and about 36% of the annual quota.
Among them, Guangdong, Shandong and Zhejiang top the list of circulation. Guangdong announced on March 30 that the 175.9 billion yuan of special bonds issued in advance in 2022 have been fully issued, and the special bond funds raised have also been allocated to cities and counties for use as soon as possible.
From the perspective of investment, according to the statistics of Xia Lei, co-director of Guohai Securities Research Institute, nearly 70% of the new special bonds issued this year are invested in the field of infrastructure, industrial parks and industrial parks. Infrastructure and transportation infrastructure are the main directions of development. According to the information disclosed in Guangdong, 38.6% of the special bonds issued in the first quarter were invested in municipal and industrial park infrastructure, 28.2% in transportation infrastructure, and 15.4% in social undertakings such as science, education, culture and health.
Hurry up and release the remaining special debt quota
Looking forward to the second quarter, experts believe that the issuance of local bonds will still show a large scale, and the issuance pace may be further accelerate. The large-scale issuance of special bonds will play an important role in the stabilization and recovery of the economy.
The executive meeting of the State Council held a few days ago emphasized that the remaining special debt quota should be issued as soon as possible. The quota issued in advance last year will be issued before the end of May, and the quota issued this year will be issued before the end of September.
Recently, local government bond issuance plans for the second quarter have been disclosed in many places, including an additional 228 billion yuan of special bonds. Since the “early approval” quota is only about 161.9 billion yuan, the Central University of Finance and Economics Zhongcai-CSI Wen Laicheng, executive director of the Pengyuan Local Finance Investment and Financing Research Institute, believes that this may mean that after the convening of the two sessions, some places have already obtained new special debt limits. “Judging from the requirements of the State Council executive meeting held recently, in the second quarter The issuance of local government bonds will also accelerate. “
Morgan Stanley Securities Chief Economist Zhang Jun said that the recent external geopolitical risks and the domestic epidemic have had a negative impact on economic growth, and macro policy needs to take stronger measures. In the context of the current task of stabilizing growth, it is expected that the issuance scale of new special bonds in the second quarter will be at least the same as that in the first quarter, making the issuance scale in the first half of the year to reach about 2.5 trillion yuan.
Yuan Haixia, Vice President of China Chengxin International Research Institute, believes that the subsequent issuance of new special bonds may be further accelerated to promote the formation of effective physical investment. The issuance will be completed in the third quarter, and the effect of promoting stable growth will appear as soon as possible.
In the opinion of experts, the construction of related projects under the promotion of special bonds will stabilize the economy in the second quarter. Recovery and stable employment play a key role.
Expanding the scope of use of special bonds
In addition to the accelerated pace of issuance, the investment direction of special bonds may also be “expanded”. The executive meeting of the State Council held a few days ago proposed to rationally expand the use of special bonds, and support projects such as public services with certain benefits on the basis of projects in the fields of transportation, energy, ecological environmental protection, and affordable housing projects.
“The water conservancy sector, as one of the major short-sights in people’s livelihood, will be supported by special debts. At the same time, in the “14th Five-Year Plan” related plans such as elderly care services Under the guidance of policies such as the modernization of agriculture and rural areas, special bonds will continue to stably support areas that benefit a wide range of people’s livelihood, invest more in rural construction under the rural revitalization strategy, and accelerate new urbanization construction such as urban renewal.” Yuan Haixia said, The proportion of infrastructure special bonds may also increase significantly. It is expected that the follow-up regions, especially the central and western regions, will accelerate the promotion of key new infrastructure projects based on information digitization.
Zhang Jun expects that more new special bonds will be invested in new energy, 5G, big data and other new infrastructure in the futurerelated projects, and affordable housing projects.
It is worth mentioning that various localities have also begun to introduce measures to improve the efficiency of the use of special bonds. For example, Shanxi has recently established an early warning mechanism for the progress of special debt expenditures and an adjustment mechanism for the overdue recovery of idle funds to speed up the progress of special debt expenditures and reduce idle funds. Yuan Haixia believes that in the future, more places may introduce similar supporting policies and establish a normalized management mechanism. Problems such as special debt funds not being used according to their purposes, being idle or misappropriated, and the construction progress being backward may be gradually improved, and the efficiency of government fund use is expected to be further improved.
(Originally titled “The Rhythm of Local Bond Issuance Will Accelerate and the Efficiency of Fund Use Will Be Improved”)