By Spy Uganda
The government of China is set to issue public bonds to its citizens worth 1 trillion Yuan (about USD141Bn) in 2020 to fight the COVID-19 pandemic, the state’s report issued on Friday said.
“The deficit-to-GDP ratio this year is projected at more than 3.6 percent, with a deficit increase of one trillion Yuan over last year. On top of this, one trillion yuan of government bonds for covid-19 control will also be issued. These are extraordinary measures for an unusual time,” the report said.
According to the report, these funds will be transferred in full to local governments for the benefit of businesses and people.
China’s local governments have issued 1.9 trillion yuan (about $268.4 billion) worth of bonds in the first four months of this year at an average interest rate lower than last year, official data showed.
In April alone, local governments issued 286.8 billion yuan worth of bonds, among which 69.3 billion were new special bonds, according to the Ministry of Finance (MOF).
By the end of April, local governments have issued 1.15 trillion yuan in special bonds, accounting for 50.3 percent of the 2.29-trillion-yuan quota allocated in advance, according to the ministry.
The local government bonds were issued at an average interest rate of 3.31 percent, down 16 basis points from last year, with an average term of issuance at 15.5 years, 5.2 years longer than in 2019.
The MOF said it has allocated in advance the latest special bonds quota of 1 trillion yuan in late April, as the country pledged to issue more local government special bonds to help mitigate the economic impact of the COVID-19 epidemic.
