Early bond issuance high on NPC agenda

With more policy effects to be witnessed during the rest of this year and early next year, the expected early issuance of local government special bonds will continue to drive infrastructure investment, paving the way for the nation's economic growth, experts said.

Their comments followed an announcement made at a meeting of the National People's Congress Standing Committee last week stating that the Standing Committee of the 14th NPC will convene its sixth session from Friday to Tuesday in Beijing, with the proposed agenda covering reviews on proposals of the early issuance of the newly added local government special bonds.

As a strong possibility exists for early issuance, experts said it will be conducive to efficient planning in terms of future bond issuances, helping meet funding requirements of key projects nationwide, and improving the effectiveness of funds.

Considering that the nation will see more stabilizing policies take effect at the end of this year and the beginning of next, it is expected that some local government special bonds in 2024 will continue to be issued in advance, and the proportion will be near the upper limit, said Wang Qing, chief macroeconomic analyst at Golden Credit Rating International.

China's fixed-asset investment grew 3.1 percent year-on-year in the first nine months, with infrastructure investment rising 6.2 percent on a yearly basis, the National Bureau of Statistics said on Wednesday.

Citing the figures, Long Chaocan, an investment consultant with China Galaxy Securities Co Ltd, said that due to a relatively high comparison base last year and deflationary factors, infrastructure investment — which seemed flat compared to previous quarters this year — was actually strong in the third quarter, effectively mitigating the impact of the sluggish real estate sector.

"Due to the time lag from the bond issuance to actual use, and with the early issuance of the new bond, infrastructure investment in the fourth quarter and early next year will still see strong support and continue to play a role in supporting the nation's recovery," Long said.

Since the beginning of this year, local special government bonds have strongly supported key infrastructure projects such as municipal buildings, industrial parks and transportation facilities, which is reflected by progress reports of major builders nationwide.

China Energy Engineering Corp Ltd said in an online statement on Wednesday that its unit in Zhejiang province launched a low-carbon wharf project at Meishan Port in Ningbo last week amid the State-owned enterprise's latest push for green transformation.

The project, which will be powered by five sets of 6.25-megawatt wind turbines, is capable of generating 5,917 kilowatt-hours annually upon completion, reducing carbon emission by 22,600 metric tons a year, CEEC said.

In terms of highway construction, China Railway 24th Bureau Group Corp, a unit of China Railway Construction Corp, said in a project progress report that an expressway linking Lianyungang and Suqian in Jiangsu province reached a milestone as the section between Shuyang county and Suyu district in Suqian has recently entered service.

The 47.7-kilometer section is part of the local government's efforts to boost the urbanization progress of Suqian's outlying regions, and facilitate integrated development of the city, which is located in the Yangtze River Delta region, said Sun Jian, project manager with CR24.

In Yiwu's Suxi township, Zhejiang, the company is also engaged in the construction of a 133-hectare international transportation hub. The hub, which is supported by the Ningbo-Jinhua Railway — itself also under construction — will serve as another major terminal of the nation's trade and improve links between countries and regions involved in the Belt and Road Initiative, CR24 said.

Upon completion, the project will be able to function as a land freight port for commodities that arrive via both rail and highway, and provide services including Customs inspection, container processing, logistics and warehousing, it added.