China Accelerates Massive Issuance of Local Government Bonds

Revenue deficits and heavy debts are plaguing all levels of Chinese government

Investors watch the stock index at a securities company August 20, 2007 in Chongqing Municipality, China. China Photos/Getty Images

China’s local authorities sped up issuing Local Government Bonds (LGBs) on a large scale, with the total amount climbing to trillions of yuan (billions of U.S. dollars) as of September.

The issuance of LGBs soared to 6.08 trillion yuan (about $1.1 trillion) from January to August, surging by 24 percent year-on-year. Among them, a newly added local bond grew by 62.4 percent, totaling 4.021 billion yuan (about $581  million), as reported by official media Securities Daily on Sept.2.