According to data released by the Ministry of Finance on February 27, 643.5 billion yuan of local government bonds were issued across the country in January.
Experts said that the early issuance and quick use of special bonds will help to form a physical workload earlier and play the role of investment in supporting the economy. Since February, the issuance of local bonds has maintained a relatively high intensity, and it is expected to continue to make moderate advance efforts throughout the year to help expand effective investment.
Speed up distribution
According to data from the Ministry of Finance, in January, 625.8 billion yuan of new bonds were issued across the country, including 134.6 billion yuan of general bonds and 491.2 billion yuan of special bonds. A total of 17.7 billion yuan of refinancing bonds were issued across the country, including 10.3 billion yuan of general bonds and 7.4 billion yuan of special bonds. In total, 643.5 billion yuan of local government bonds were issued across the country, including 144.9 billion yuan of general bonds and 498.6 billion yuan of special bonds.
Entering February, the issuance of local bonds still maintained a relatively high intensity. Wind data shows that as of February 27, a total of 576.138 billion yuan of local bonds have been issued and will be issued as planned in February, of which a total of 335.753 billion yuan of new special bonds have been added.
Industry insiders believe that the issuance of local bonds this year will still maintain a pre-paced pace. The report issued by CICC pointed out that all localities have disclosed the quota of new local bonds approved in advance in 2023, of which the new special bonds totaled 2.19 trillion yuan and the new general bonds totaled 0.43 trillion yuan, respectively, compared with 2022. The limit increases by 32% and 50%. Tan Yiming, chief fixed income analyst at Minsheng Securities, believes that in 2023, special bonds will continue to be moderately advanced. Judging from the actual issuance progress of special bonds over the years, the advance approval quota will basically be issued within 3 to 6 months.
Relevant departments have emphasized accelerating the issuance and use of special bonds. Zhang Jianmin, deputy director of the Investment Department of the National Development and Reform Commission, said that in the first quarter, it will accelerate the issuance and use of local government special bonds in advance, and accelerate the issuance of a batch of investment plans within the central budget.
Improve the efficiency of capital use
While accelerating the issuance and use of special bonds, the efficiency of fund use will also be improved.
In the 2023 budget report, many places requested to strengthen relevant project reserves to promote the improvement of quality and efficiency in the management of bond issuance and use. For example, Beijing proposes to properly manage and use special bonds, optimize the direction of bond use, focus on supporting key areas determined by the central government and the municipal government, and make deep and detailed project reserves in accordance with the principle of funds following projects.
Hunan Province proposes to strictly control the maturity, compliance, and balance of special bond projects to improve the quality of bond issuance projects. Establish a rolling management mechanism for special bond projects to improve the scientific accuracy of bond issuance.
“All localities should further improve the quality and quantity of project reserves to provide strong support for the issuance and use of special bonds.” Yuan Haixia, deputy director of China Chengxin International Research Institute, believes that in terms of quantity, speed up the reserve of qualified projects, and allocate 2% according to the amount of special bonds as much as possible. To triple the reserve, strengthen the reserve and rolling succession of major projects, and form a virtuous circle in which one batch is reserved, one batch is started, one batch is under construction, and one batch is completed. In terms of quality, around the “14th Five-Year Plan” priority to reserve relevant major projects, the feasibility of project construction and the time when various funds are in place are included in the reserve standards.
Accelerate the formation of physical workload
Expansion of investment is an important starting point for steady growth this year. Experts believe that the early issuance and use of special bonds will help to form a physical workload earlier, promote the expansion of effective investment, and play the role of investment in supporting the economy.
“From the perspective of rhythm, special bonds will continue to make moderate efforts to accelerate the formation of physical workloads.” Tan Yiming said that from the perspective of investment, infrastructure investment will focus on 102 major projects in the “14th Five-Year Plan” plan. Both new and old infrastructure investment are expected to accelerate.
Judging from the high-frequency data, the operating rate of cement mills and the cement shipment rate have rebounded rapidly recently, significantly higher than the level of the same period last year, and the cement storage capacity ratio has also fallen from a high level. Wang Qing, chief macro analyst of Oriental Jincheng, predicts that the growth rate of infrastructure investment in the first quarter is expected to maintain a double-digit level. Sun Fu, chief macro analyst at Huaxi Securities, said that overall, the follow-up local special bond funds are sufficient, and the trend of infrastructure construction is more likely to continue to improve.
In addition to special bonds, Tan Yiming believes that policy development financial instruments are expected to continue to exert force, and the situation of mortgage supplementary loans and social capital participation is also worthy of attention.
“With the continuous availability of funds, the physical workload formed by the construction of infrastructure projects this year will be better guaranteed. On the whole, it is estimated that this year’s fixed asset investment will increase by 5.5% year-on-year, of which infrastructure investment will increase by 7.5% year-on-year.” Zhixin Investment Lian Ping, chief economist and director of the research institute, said.
(Ouyang Jianhuan)
[Responsible editor: Cao Jing]