China Local Governments Flood Market With $179 Billion In Bonds

Local governments in China have flooded the market with Rmb1.2tn ($179bn) in bond issuance during the first three months of the year, in another sign of how Beijing hopes to kick-start economic growth with infrastructure spending, the Financial Times reported. The fundraisings represent a dramatic shift in how China is allowing smaller governments to raise debt — there was no local bond issuance during the first quarter over the past two years, according to data from Moody’s. The efforts come as China faces its slowest rate of economic growth in almost three decades. Small banks around the country are grappling with unprecedented levels of bad debt and a record number of local government companies have experienced defaults. Official gross domestic product figures set to be released on Wednesday will give a fuller picture of whether the conditions are improving after several months of gloomy data. Read more