Beijing is trying to spur more regional infrastructure investment to support the economy as the US-China trade war drags on, weighing on its vast manufacturing sector and hurting business confidence. But construction activity so far has been more modest than expected, raising expectations policymakers will need to roll out additional growth boosting measures. The central government has announced a quota of 2.15 trillion yuan for local governments to sell special bonds this year to fund road, rail and water projects and other civic works.
In July alone, net issuance of such bonds totaled 299.7 billion yuan, the ministry said in a statement on its website.
China has accelerated bond issuance in recent months in order to fill the full-year quota by the end of September. Policy insiders have said local governments may be allowed to sell more bonds in the fourth quarter, but this could only be considered if the economy continues to falter and more funds are needed to keep projects going once the quota is used up.