Measures need to be taken to ensure national bonds are used as required

China's top legislature has approved the central government's plan to issue an additional 1 trillion yuan ($136.93 billion) in special treasury bonds in the fourth quarter. All of it will be allocated to local governments through transfer payment for supporting post-disaster recovery and reconstruction, making up for weak areas in disaster prevention and relief, and improving the overall ability to withstand natural disasters.

Since the beginning of this year, many places across China have been hit by heavy rains, floods, typhoons and other disasters. Such extreme weather events have been occurring frequently in recent years, necessitating the need to upgrade the country's disaster prevention preparedness. The central authorities met on Aug 17 and decided to further improve China's disaster prevention, mitigation and relief capabilities.

However, this cannot be done without substantial funding support. Although China's budget at the beginning of the year covered conventional disaster prevention, reduction and relief funds, it is not enough to meet the needs of long-term and upgraded disaster prevention, reduction and relief. In order to implement the deployment of the Aug 17 meeting, the central government thus decided to issue the national bonds, raising the deficit-to-GDP ratio from 3 percent to 3.8 percent.

All necessary measures should be taken to ensure the issuance of these treasury bonds on schedule, and strengthen oversight to ensure the funds are used as required.

Considering that local governments have less room to significantly increase funding, the issuance of the special treasury bonds is an important move to not only practice the people-centered development philosophy, but also help ease the pressure on local governments and optimize their expenditure and debt structure.

The use of these government debt funds will also help drive domestic demand and further consolidate the economic recovery.

Given that China's government debt ratio has been lower than other major economies, the Chinese government still has space to issue more national bonds, as the overall risk is still under control. The authorities will establish a regular supervision mechanism to closely monitor the use of national debt funds, and strictly investigate illegal activities such as funds misuse, to effectively prevent debt risks.

XINHUA NEWS AGENCY