East China’s Zhejiang province on Tuesday announced plans to issue 56.5 billion yuan of refinancing special bonds on November 25 to swap existing local government hidden debt, with 10-year, 15-year, and 30-year maturities, with respective issuance of 5.96 billion yuan, 22.98 billion yuan, and 27.57 billion yuan.
On the same day, Ningbo, a city in Zhejiang province, also disclosed plans to issue 24.9 billion yuan in 15-year refinancing special bonds on November 25 to swap hidden debt.
In addition, Zhejiang province announced plans to issue 11.1 billion yuan of refinancing special bonds on November 25 to repay outstanding debt. Qinghai province disclosed plans to issue 500 million yuan in refinancing bonds and 400 million yuan in special refinancing bonds to repay existing debt.
Since November 12, seven regions have disclosed plans to issue refinancing special bonds to swap local government hidden debt, planning to issue a total of 305.4 billion yuan such bonds.
Ranked by issuance scale, Jiangsu province leads with 120 billion yuan, followed by Zhejiang Province with 56.5 billion yuan. Other regions include Guizhou with 47.6 billion yuan, Henan with 31.8 billion yuan, Ningbo with 24.9 billion yuan, Qingdao with 14.2 billion yuan and Dalian 10.4 billion yuan.
The announcements came after the Standing Committee of the 14th National People’s Congress on November 8, approved an increase of 6 trillion yuan in local government debt limits for swap their hidden debt. The entire additional debt limit will be allocated as special debt quotas, approved in one go and implemented over three years.
Moreover, according to Minister of Finance Lan Fo’an, starting in 2024, 800 billion yuan per year from new local government special bonds will be allocated over five years to supplement government funds for debt reduction, swapping 4 trillion yuan of hidden debt. Together, these policies provide 10 trillion yuan in resources for local debt resolution.
The finance ministry said that it had distributed the 6 trillion yuan debt limit to local governments on November 9 and it’s now expediting the implementation of related policies, strengthening local guidance to optimize the use of the new debt limits and enhance policy impact.