China’s Infrastructure Bond Drought Weighs on Investment

One measure of borrowing by China’s local governments for infrastructure is on pace to hit a six-year low, as Beijing clamps down on risks in a strategy shift that calls into question its promise to stop an unprecedented investment slump.

Of the 4.4 trillion yuan ($626 billion) quota for new local government special bond sales this year, around 3.02 trillion yuan is available for infrastructure projects — the lowest since 2019 — after the remaining 1.38 trillion yuan was used to repay loans, according to Bloomberg calculations based on official data. That puts the amount of bonds meant for investment in line to decrease for a second straight year.