China's Local Government Bond Issuance in Q1 Rises 9.3% Year-on-Year, About Half Used for Debt Repayment
In the first quarter, China's local government bond issuance reached approximately 3.1 trillion RMB, a 9.3% year-on-year increase. About half of this amount was used for refinancing maturing debt, highlighting the significant 'debt rollover' practice to alleviate immediate repayment pressure.
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- 📰 Published: April 13, 2026 at 12:24
- 🔍 Collected: April 13, 2026 at 12:51 (26 min after Published)
- 🤖 AI Analyzed: April 13, 2026 at 14:47 (1h 56m after Collected)
Central News Agency
(CNA reporter Li Yawen, Shanghai, 13th) In the first quarter, China issued approximately 3.1 trillion RMB (about 14.26 trillion NTD) in local government bonds, a 9.3% year-on-year increase. Among these, refinancing bonds amounted to about 1.7 trillion RMB, mainly used to repay principal on maturing bonds and replace debt to achieve the purpose of 'borrowing new to pay off old.'
Public data shows that in the first quarter, China's issuance of local government bonds was about 3.1 trillion RMB, up 9.3% year-on-year.
Within the total amount, new bond issuance was about 1.4 trillion RMB, a 14.6% year-on-year increase, mainly for major investments such as infrastructure. Refinancing bond issuance was about 1.7 trillion RMB, up 5.2% year-on-year, primarily used to repay maturing bond principal, replace debt, and settle arrears with enterprises, thereby alleviating current local repayment pressure by borrowing new to pay off old.
Wen Laicheng, a professor at the School of Finance and Taxation at the Central University of Finance and Economics, stated in a report by Yicai that the rapid issuance of new local government bonds in the first quarter was mainly because this year is the opening year of the '15th Five-Year Plan' (2026-2030). Localities hope for a 'good start' to the economy, so they are accelerating bond issuance to promote the construction of major projects.
Wen believes that although the issuance speed of local government refinancing bonds slowed in the first quarter of this year, the absolute scale is still large. The funds are mainly used to replace existing hidden debt. Currently, the pressure on local governments to resolve existing hidden debt remains, including tasks such as managing existing PPP projects (Public-Private Partnership projects) and settling arrears with enterprises.
To prevent and resolve local government hidden debt risks, the central government launched a package of debt resolution plans in 2024.
The Yicai report pointed out that China's Ministry of Finance previously stated that the package of debt resolution policies has reduced local government interest expenses and eased the pressure of principal and interest repayment, giving local governments room to mitigate hidden debt risks. A research report from Tianfeng Securities noted that the maturity of local bonds was slightly extended in the first quarter of this year, with an average issuance period of 14.79 years, an extension of 0.31 years compared to 2025. (Editor: Chang Shu-ling) 1150413
(CNA reporter Li Yawen, Shanghai, 13th) In the first quarter, China issued approximately 3.1 trillion RMB (about 14.26 trillion NTD) in local government bonds, a 9.3% year-on-year increase. Among these, refinancing bonds amounted to about 1.7 trillion RMB, mainly used to repay principal on maturing bonds and replace debt to achieve the purpose of 'borrowing new to pay off old.'
Public data shows that in the first quarter, China's issuance of local government bonds was about 3.1 trillion RMB, up 9.3% year-on-year.
Within the total amount, new bond issuance was about 1.4 trillion RMB, a 14.6% year-on-year increase, mainly for major investments such as infrastructure. Refinancing bond issuance was about 1.7 trillion RMB, up 5.2% year-on-year, primarily used to repay maturing bond principal, replace debt, and settle arrears with enterprises, thereby alleviating current local repayment pressure by borrowing new to pay off old.
Wen Laicheng, a professor at the School of Finance and Taxation at the Central University of Finance and Economics, stated in a report by Yicai that the rapid issuance of new local government bonds in the first quarter was mainly because this year is the opening year of the '15th Five-Year Plan' (2026-2030). Localities hope for a 'good start' to the economy, so they are accelerating bond issuance to promote the construction of major projects.
Wen believes that although the issuance speed of local government refinancing bonds slowed in the first quarter of this year, the absolute scale is still large. The funds are mainly used to replace existing hidden debt. Currently, the pressure on local governments to resolve existing hidden debt remains, including tasks such as managing existing PPP projects (Public-Private Partnership projects) and settling arrears with enterprises.
To prevent and resolve local government hidden debt risks, the central government launched a package of debt resolution plans in 2024.
The Yicai report pointed out that China's Ministry of Finance previously stated that the package of debt resolution policies has reduced local government interest expenses and eased the pressure of principal and interest repayment, giving local governments room to mitigate hidden debt risks. A research report from Tianfeng Securities noted that the maturity of local bonds was slightly extended in the first quarter of this year, with an average issuance period of 14.79 years, an extension of 0.31 years compared to 2025. (Editor: Chang Shu-ling) 1150413