The issuance volume in the first quarter was much lower than the same period in the previous two years.
Why the special debt is so late
Our reporter Li Hualin
This year's "Government Work Report" proposed that it plans to issue 3.65 trillion yuan in special bonds for local governments.
In terms of scale, this figure is slightly lower than last year. However, considering that my country's epidemic has been effectively controlled and the economy has gradually recovered, this year's special debt still maintains a certain level of expenditure, which has attracted wide attention from all parties.
Judging from the actual situation in the first quarter, the issuance of special bonds is currently slow, and the issuance volume is much lower than the same period in the previous two years.
So, what is the difference between this year's special bond issuance?
Will the subsequent issuance speed up?
What are the key support areas?
The release rhythm has changed
This year, the issuance of new bonds by local governments is "long overdue."
On March 25, Hubei Province issued 41.2 billion yuan of government bonds, of which 25 billion yuan of new bonds, including 10 billion yuan in general bonds and 15 billion yuan in special bonds, kicked off the issuance of new bonds by local governments, which was later than last year. It took more than two months.
Long Xiaoyan, an associate researcher at the Financial Research Center of the Chinese Academy of Fiscal Sciences, told reporters that apart from the late opening of the issuance, the issuance structure of local government bonds is also different this year. Refinancing bonds have become the main type of issuance in the first quarter, and new bonds have been issued. The issuance quota has dropped significantly compared with the previous two years.
According to data released by the Ministry of Finance, in the first quarter of this year, the issuance of refinancing bonds amounted to 875.7 billion yuan, accounting for 96% of the issuance of local government bonds; only 36.4 billion yuan was issued for new bonds, of which 15 billion yuan was newly issued for special bonds.
Compared with the previous two years, the structure has changed significantly.
Taking 2020 as an example, the new bond issuance in the first quarter reached 1542.4 billion yuan, of which the new special bond issuance amounted to 1.0829 billion yuan, and the refinancing bond issuance amounted to only 68.1 billion yuan, accounting for only 4% of the local government bond issuance.
“Refinancing bonds played the leading role in the first quarter of this year because it gave priority to supporting the follow-up financing of projects under construction, and through the issuance of refinancing bonds, to prevent the emergence of'half-refinancing' projects and repay existing debts.” Long Xiaoyan said.
An important reason for the slowdown in the issuance of special bonds is that this year's advance approval quota was issued slightly later than in previous years.
In order to promote the use of special debt funds at the beginning of the year, the Ministry of Finance issued a portion of the new special debt quota in advance at the end of the previous year.
However, due to the large scale of the special bonds issued in 2020, the policy effects are still being released, and the project construction funds are relatively sufficient, this year's special bond issuance did not issue the quota in advance at the end of last year, but waited until early March before the Ministry of Finance issued the local part. The newly-added special debt amount was 1.770 billion yuan.
At the same time, compared with previous years, this year puts more emphasis on the risk prevention and control of special bond issuance.
"According to the spirit of the Central Economic Work Conference and the National Financial Work Conference, local government bond issuance must coordinate development and security, balance the relationship between development promotion and risk prevention, and achieve financial security. Therefore, all localities should pay attention to special debt. Starting with project preparation and evaluation, we will strive to improve the performance of bond fund use, and appropriately relax the time limit for issuance. This will also have a certain impact on the speed of new bond issuance in the short term." Long Xiaoyan said.
Priority support for construction in progress
As an important source of investment funds for local governments, in recent years, new bond funds for local governments have been mainly invested in major infrastructure areas such as people's livelihood.
The relevant person in charge of the Ministry of Finance previously introduced that last year’s 3.75 trillion yuan of new special debt funds were used to support small and medium-sized banks to resolve risks, as well as transportation, municipal and industrial park infrastructure, as well as vocational education, childcare, medical care, and pensions. People's livelihood services account for about 80%, and they are used for ecological and environmental protection, agriculture, forestry and water conservancy, energy, cold chain logistics and other fields accounting for about 20%.
This year's "Government Work Report" proposes to optimize the use of bond funds, give priority to supporting projects under construction, and rationally expand the scope of use.
“The use of special debt this year is mainly to ensure that the construction in progress will not stop. The key support areas will be more focused on the long-term benefits of the shortcomings, from traditional'iron public foundation' infrastructure projects to new infrastructure projects, and will also Increasing tilt towards public services that protect people’s livelihood.” said Liu Xiangdong, deputy director of the Economic Research Department of the China Center for International Economic Exchanges.
The current funding directions announced by various localities also illustrate this point.
For example, Hubei issued a special bond of 15 billion yuan in March, which is mainly used for major projects such as transportation infrastructure, shantytown renovation, public health, cultural tourism, and education.
Henan issued a new special bond of 24.7 billion yuan in early April. The funds were mainly used for urban and rural development, shantytown reconstruction and social undertakings.
As the "14th Five-Year Plan" is fully launched, the areas of special debt investment will also be gradually adjusted and optimized in accordance with macro-control. In addition to focusing on supporting transportation infrastructure construction, agriculture, forestry and water conservancy, the scope of use will also be reasonably expanded for use by the Party Central Committee and the State Council. The identified key areas of the project.
"For example, support major projects that promote regional coordinated development, promote the construction of'two new and one heavy', implement a number of major projects such as transportation, energy, water conservancy, and build new infrastructure such as information networks." Long Xiaoyan said, this will It is conducive to the overall planning of development and security, promotes economic stability and progress, and gives full play to the role of special debts in stabilizing investment, making up for shortcomings, and benefiting people's livelihood.
Improve the efficiency of issuance
Many experts believe that the issuance of new local government bonds will accelerate in the second quarter.
"As new and under-construction projects continue to start construction, it is expected that the amount of funds required will increase substantially, which will prompt local governments to speed up the issuance of special bonds, and the pace of bond issuance will show an accelerated trend." Liu Xiangdong said.
From the perspective of historical issuance performance, new special bonds usually have a peak of issuance within two months after the quota is issued.
“Because the new special bonds were not issued from January to February this year, the quota was only released in March, and the number of special bonds due from April to June is large, so there may be a small upsurge of special bond issuance in April.” Industrial Research Hu Xiaoli, a domestic macro analyst, said.
At present, Sichuan, Shandong, Hunan, Henan and other places have disclosed the preliminary issuance plan of local government bonds in the second quarter.
For example, Sichuan plans to issue a total of 145.1 billion yuan in local bonds in the second quarter, of which 76.1 billion yuan of new special bonds will be issued in June.
Hunan plans to issue a total of 152.9 billion yuan of local government bonds in the second quarter, of which 55.3 billion yuan of new special bonds will be issued.
In the second quarter, Shandong plans to issue a total of 173.6 billion yuan in local bonds, including 117.2 billion yuan in new special bonds.
Experts believe that the "gate opening" of local government bond issuance this year is later than in previous years, which also means that the special bond issuance window will be longer, and it is expected to continue from mid-March to the end of the year. The release rhythm will remain relatively stable, and it is not expected to get together. The peak of issuance.
In addition to doing a good job in issuance, improving the use efficiency of special bonds has also become a key task for local governments to manage special bonds.
This year’s budget report requires all localities to make good use of local government special bonds, strengthen high-quality project reserves, appropriately relax the time limit for issuance, optimize bond issuance maturity structure, and rationally expand the scope of use in accordance with the principle of “funds follow the project”.
"Reasonably expand special bonds and improve the efficiency of issuance and utilization. It is necessary not only to accurately focus on key areas such as projects under construction, but also to focus on the requirements of the'six stability and six guarantees', check for deficiencies, identify key areas and key links, and make use of government funds The guiding role of the company attracts social capital to participate and forms a virtuous and interactive economic cycle." Liu Xiangdong said.
Long Xiaoyan also suggested that in order to make better use of the economic stimulus of special debt, it is also necessary to increase the government’s effectiveness by diverting fiscal funds and using bond funds on the basis of adhering to tight budgets and properly solving the practical problems of grassroots liquidity. Investment intensity.
At the same time, further optimize the market environment, encourage more market forces to expand investment, and promote the formation of special bond investment and other social investments to effectively stimulate economic growth.
Our reporter Li Hualin