Financial Times:

Just now it has been mentioned that China will issue special bonds to support infrastructure projects. Based on our understanding, the requirement of special bonds is that the revenue should match the capacity of debt repayment. As many local governments insist there is a lack of profitable infrastructure projects, how will this influence their development?

Mao Shengyong:

This issue can be better addressed by my colleagues of the Ministry of Finance or other government bodies. However, I will answer it based on my own understanding.

Last year, China issued 1.35 trillion yuan of local government special bonds. The figure this year has been raised to 2.15 trillion yuan, and our work in this field has basically concluded. Next, these special bonds need to be implemented on specific projects. During the issuing process, the central government and other government bodies consider local governments' capacity of debt repayment, and a categorized management system has been established regarding the amount of special bonds issued. For example, a local government with a higher debt level will receive only a comparatively small amount of special bonds; meanwhile those with stronger capacity in debt repayment, huge potential and a high level of development, as well as promising investment future, will be issued a much larger amount. We hope special bonds can function as the guide for private capital to improve the development of infrastructure. Thank you.