China's Local Government Bond Issuance in Q1 Rises 9.3%, About Half Used for Debt Repayment

Central News Agency reporter Li Ya-wen from Shanghai reported on April 13 that China's local government bond issuance in the first quarter amounted to approximately RMB 3.1 trillion (about NTD 14.26 trillion), a year-on-year increase of 9.3%. Among these, about RMB 1.7 trillion was issued as refinancing bonds, mainly used for repaying maturing bond principals and debt rollovers, achieving the goal of 'borrowing new to repay old.' Public data shows that China's local government bond issuance in Q1 increased by 9.3% to about RMB 3.1 trillion. Within the overall scale, new bond issuance was about RMB 1.4 trillion, a 14.6% year-on-year increase, primarily used for major investments such as infrastructure. Refinancing bond issuance was about RMB 1.7 trillion, a 5.2% year-on-year increase, mainly used for repaying maturing bond principals, debt rollovers, and settling outstanding corporate accounts, thereby alleviating local current debt repayment pressure through 'borrowing new to repay old.' Professor Wen Laicheng of the Central University of Finance and Economics' School of Taxation stated in a First Financial report that the faster pace of new local government bond issuance in Q1 is mainly due to this year being the start of the '15th Five-Year Plan' (2026-2030), with local governments hoping for a 'good start' to the economy, thus accelerating bond issuance to promote the commencement of major projects. Wen Laicheng believes that while the pace of local government refinancing bond issuance slowed in Q1 this year, the absolute scale remains large, with funds mainly used for replacing existing implicit debts. Local governments still face significant pressure to resolve existing implicit debts, including managing existing PPP projects (Public-Private Partnership projects) and resolving outstanding corporate accounts. To prevent and resolve local government implicit debt risks, the central government launched a package of debt resolution plans in 2024. First Financial reported that the Chinese Ministry of Finance previously stated that the package of debt resolution policies reduced local government interest expenditures and alleviated principal and interest repayment pressure, providing room for easing local government implicit debt risks. Tianfeng Securities' research report pointed out that the issuance period of local bonds slightly lengthened in Q1 this year, with an average issuance period of 14.79 years, an extension of 0.31 years compared to 2025. (Editor: Zhang Shuling) April 13, 2026