China to better leverage local government special-purpose bonds to support economy

BEIJING -- The General Office of the State Council has issued a document on improving the management mechanism of local government special-purpose bonds, aiming to better leverage the fiscal tool to support the economy.

Projects such as buildings for official use, vanity projects and theme parks should be included in the negative list for the allocation of special-purpose bonds, according to the document published on Wednesday.

Special-purpose bonds are legally prohibited from being used for routine expenditures, and it is strictly forbidden to use them for paying wages, pensions, and covering operational expenses or debt interest payments, the document said.

The scope of special-purpose bonds for project capital includes infrastructure for emerging industries such as information technology, new materials, and biomanufacturing. It also encompasses the intelligent transformation of traditional infrastructures, including highways and airports, as well as infrastructure for health, elderly care, child care and provincial-level industrial parks.

Local governments should accelerate the issuance of special-purpose bonds and strengthen the supervision of the use of the bond funds, according to the document.