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local governments have accelerated the pace of borrowing and invested the funds in major infrastructure projects to expand effective government investment and stabilize growth.

at present, the legal channel for local governments to borrow money is basically through issuing local government bonds. according to public data, in the first eight months of this year, the country issued about 5.4 trillion yuan of local government bonds, a year-on-year decrease of about 14%.

overall, the pace of local borrowing this year is still slower than the same period last year, but bond issuance accelerated significantly in august.

due to the accelerated issuance of new bonds in august, the national issuance of local government bonds exceeded 1 trillion yuan (about 1.2 trillion yuan) in august, an increase of nearly 0.5 trillion yuan from july, and the net financing scale increased by about 0.6 trillion yuan from july.

the acceleration of bond issuance in august is in line with market expectations. the central government has repeatedly called for accelerating the issuance and use of special bonds. in the "report on the implementation of china's fiscal policy in the first half of 2024" (hereinafter referred to as the "report") recently released by the ministry of finance, it is required to accelerate the issuance and use of local government special bonds in the next step to form more physical workload.

wen bin, chief economist of china minsheng bank, believes that the issuance of local government bonds was slow in the first half of the year. in order not to affect the use of bond funds within the year, various departments and regions have accelerated the deployment of local government bond issuance since june. the issuance of local government bonds accelerated significantly in august, which will support faster growth in infrastructure investment.

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