As an effort to leverage the role special bonds play in ensuring stable growth and tackling areas of weakness, the State Council, in September, clearly required the additional quota of 2020 special bonds to be issued in advance, focusing on major infrastructure projects in transportation, energy, agriculture, forestry and water conservancy, eco-environment protection, people's livelihood services, municipal administration and industrial parks. According to a market analysis, the quota for the special bonds to be released ahead of schedule in 2020 will be about RMB1.29 trillion. 

Therefore, all regions have accelerated the declaration of special bonds in an attempt to engage in a number of such projects. 

For now, some declarations of 2020 special bonds have been disclosed. 

The Langzhong City of Sichuan Province, for example, is going to design 25 projects for the first batch of special local government bonds in 2020, with a total investment of RMB16.95 billion, and plans to declare RMB8.11 billion of special bonds, all of which have been reported to the Sichuan Provincial Development and Reform Commission and the Finance Department. The local government "made every effort to declare the special bonds", said the Guangnan County Development and Reform Commission of Yunnan Province. At present, its 28 projects for special local government bonds of the first batch in 2020 have been reported, with a total investment of RMB33.648 billion and the special bond declaration totaled RMB12.027 billion. 

This year has seen more restrictions on declaring the first batch of special bonds in advance. For instance, special bonds for land reserves, which show little contribution to steady growth, will be dismissed. Priority will be given to projects under construction and major projects that will commence prior to March 2020 with sound economic and social benefits, people's expectations and significant value. In this way, the bonds can be brought into full play in time. 

Meanwhile, the local governments also take responsibility to review the declaration. For example, the Jurong Municipal Finance Bureau has promoted the cooperation and coordination with the local Development and Reform Commission and other relevant responsible departments to shoulder their due responsibilities, strictly control the review and carefully select special bond projects, while giving full consideration to project returns, financing balance and local debt risk. 

The quota for 2020 special bonds will be finalized at next year's National People's Congress and the Chinese People's Political Consultative Conference. In recent years, the quota of special bonds has been on the rise, and it showed a year-on-year increase of RMB800 billion in 2019 to RMB2.15 trillion. Due to the need of stable growth, market analysts reckon that the quota of 2020 special bonds is expected to exceed RMB3 trillion. 

Source | www.yicai.com