These Are All the Different Bonds China Hopes Will Boost Economic Growth

When China’s Finance Minister Lan Fo’an unveiled his nation’s latest effort to support flagging economic growth, attention fell on a comment about bond issuance and its impact on spending. Unlike the US and other developed nations — where fiscal stimulus packages are typically framed as a pledge to spend a certain amount of money — in China investors take their cue from the magnitude of borrowing that will be unleashed. But there’s a variety of different debt types, reflecting the complexity of a budget system with multiple layers of authorities and different policy goals. Here’s a guide to what each type of security means.

China’s official annual fiscal deficit is approved every March by the full session of the National People’s Congress, the Communist Party-controlled parliament. The deficit is funded by the issuance of general bonds. The bulk of this debt is at the central government — or sovereign — level, with local authorities only allowed to run a small shortfall.