{"id":199046,"date":"2025-06-20T05:28:10","date_gmt":"2025-06-20T05:28:10","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/199046\/"},"modified":"2025-06-20T05:28:10","modified_gmt":"2025-06-20T05:28:10","slug":"word-is-bonds-chinas-provinces-use-special-purpose-funds-to-pay-debts","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/199046\/","title":{"rendered":"Word is bonds: China\u2019s provinces use special-purpose funds to pay debts"},"content":{"rendered":"<p datatype=\"p\" data-qa=\"Component-Component\" class=\"e8zc9q40 css-1c6uqr6 ec74h0k1\">Hunan has become the first province in China to use the proceeds of special-purpose bonds to guarantee government payments to enterprises, with 20 billion yuan (US$2.78 billion) allocated for this year.<\/p>\n<p datatype=\"p\" data-qa=\"Component-Component\" class=\"e8zc9q40 css-1c6uqr6 ec74h0k1\">The inland province made the adjustment to its annual fiscal budget last month, marking the first time the bonds \u2013 typically earmarked for revenue-generating construction projects \u2013 will be used to cover government arrears.<\/p>\n<p datatype=\"p\" data-qa=\"Component-Component\" class=\"e8zc9q40 css-1c6uqr6 ec74h0k1\">Proceeds will be distributed based on eligible outstanding debts from existing investment projects, according to a statement from the province\u2019s department of finance issued last week. The department said the disbursements will be prioritised to help cities and counties across Hunan complete ongoing construction, clear their obligations and reduce fiscal risk.<\/p>\n<p>David Wong, a lecturer at Hang Seng University in Hong Kong, called the move \u201ca step in the right direction,\u201d but warned that the 20-billion-yuan sum could be \u201ca drop in the bucket\u201d compared with the scale of <a target=\"_self\" class=\"e1yy41x40 ef9u0v01 css-1ankfgb ecgc78b0\" href=\"https:\/\/www.scmp.com\/economy\/china-economy\/article\/3296162\/china-urges-prudence-over-plenty-rural-projects-local-debt-clouds-linger?module=inline&amp;pgtype=article\" title=\"\" data-qa=\"BaseLink-renderAnchor-StyledAnchor\" rel=\"noopener\">local government debt<\/a>.<\/p>\n<p datatype=\"p\" data-qa=\"Component-Component\" class=\"e8zc9q40 css-1c6uqr6 ec74h0k1\">\u201cIt remains unclear which arrears will be prioritised or which firms will actually receive payments,\u201d he said. \u201cThe more complex issue is that this is not simply a matter of \u2018government owing enterprises\u2019 but a complex web of entangled triangular debts.\u201d<\/p>\n<p datatype=\"p\" data-qa=\"Component-Component\" class=\"e8zc9q40 css-1c6uqr6 ec74h0k1\">Criss-crossing chains of obligation make the repayment picture opaque for a number of localities, Wong said.<\/p>\n<p datatype=\"p\" data-qa=\"Component-Component\" class=\"e8zc9q40 css-1c6uqr6 ec74h0k1\">\u201cIn many cases, local governments have indirectly incurred debts through state-owned enterprises (SOEs), which in turn owe money to each other. Some SOEs are involved in circular guarantees and cross-debt relationships with both local governments and private companies.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Hunan has become the first province in China to use the proceeds of special-purpose bonds to guarantee government&hellip;\n","protected":false},"author":2,"featured_media":199047,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3090],"tags":[3801,51,1395,80590,33101,80595,1700,80591,3749,80593,80596,80592,80594,80597,16,15,80598],"class_list":{"0":"post-199046","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-beijing","9":"tag-business","10":"tag-china","11":"tag-china-debt","12":"tag-china-economy","13":"tag-coface","14":"tag-economy","15":"tag-hang-seng-university","16":"tag-hong-kong","17":"tag-hunan","18":"tag-ministry-of-finance","19":"tag-soes","20":"tag-special-purpose-bonds","21":"tag-state-owned-enterprises","22":"tag-uk","23":"tag-united-kingdom","24":"tag-yunnan"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114714044342521917","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/199046","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=199046"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/199046\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/199047"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=199046"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=199046"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=199046"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}