Economic Daily:

In January, special bonds were issued significantly faster than during the same period last year. What were the considerations behind this? And how have the funds been put into use? Thank you.

Liu Kun:

Vice Minister Xu Hongcai and I covered the questions you raised in his answers and in my opening remarks. I'd like to invite Mr. Xu to elaborate on the matter.

Xu Hongcai:

Thank you. This is an important question. As Finance Minister Liu Kun said, in 2022 we should adopt proactive fiscal policy in advance and make full use of the policy toolbox, issue policies earlier and see results earlier, so as to let the policies be more targeted and effective.. In line with the decisions and plans of the CPC Central Committee and the State Council, the MOF has allocated 1.46 trillion yuan (about $229 billion) from its 2022 quota for local government special bonds in advance, authorized by the National People's Congress (NPC) Standing Committee and agreed upon by the State Council. 

The advance allocation is characterized by the country's proactive fiscal policy. The special bonds should be issued properly in accordance with the economic climate and macroeconomic regulation. China's economy is currently facing new downward pressure, which requires fiscal policies to be "brought forward appropriately." Set to be allocated in advance, issued and used at high speed, these special bonds are expected to encourage effective investment. As Minister Liu Kun introduced earlier, statistics show that many new projects were started and expenditures grew a lot. In January, local governments already issued 484.4 billion yuan of newly-added special bonds, accounting for 33.2%, or almost one-third, of the advanced allocation of 1.46 trillion yuan. Among the new bonds, about 30% were spent on infrastructure related to city planning and industrial parks, 20% on the construction of transportation infrastructure, 20% on fields related to social construction like education, healthcare and elderly care, and the remaining 30% was spent on other fields. We have launched this policy as part of implementing in advance the decisions and plans of the CPC Central Committee . The results in January were relatively good. In the following months, we will continue to provide guidance to local governments and help them speed up the use of funds, so as to accomplish the work as soon as possible and better promote economic growth.

Thank you.