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China’s Local Government Bond Sales Fall Short of Expectations

  • Bond issuance in January was 12% of estimated annual quota
  • Investors are betting on infrastructure boost to economy

China’s local governments have been selling bonds at a modest pace in January, undermining market expectations of a strong fiscal boost early in the year to cushion a slowing economy.

Local authorities are scheduled to issue 516.8 billion yuan ($81.8 billion) of new general and special bonds by the end of January, which accounts for 12% of estimated annual quota for 2022, according to Bloomberg data. The bonds are mainly used for infrastructure spending, a key way for policy makers to deliver stimulus to the economy.