Strengthen the Protection of Expenditures in Key Areas, Moderately Speed up the Issuance of Local Government Bonds
On August 27, Ministry of Finance of the People's Republic of China released the "Report on China's fiscal policy Execution in the First Half of 2021" (the "Report"). The Report discloses the financial performance in the first half of the year in the areas of special debt issuance, "emission peak and carbon neutrality" construction, and science and technology innovation.
The Report proposes to accelerate the progress of fiscal expenditures, strengthen the protection of expenditures in key areas, and effectively improve the efficiency of the use of funds. The report proposes to speed up the issuance of local government special bonds, make good use of local government special bond funds, guide local governments to strengthen project reserves, and promote the formation of physical workload at the end of this year and early next year. Strengthen the performance management of special debt project funds to enhance the allocation of bond funds and service efficiency.
Since 2021, the issuance of local bonds has slowed down significantly compared to the past. Data presentation, from January to July, the country issued 3,997.9 billion yuan of local government bonds. Among them, 2,139.6 billion yuan of special bonds were issued, less than 40% of the annual issuance quota.
The Report mentions that it will moderately speed up the issuance of local government special bonds, make good use of local government special bond funds, guide localities to strengthen project reserves, and promote the formation of physical workload at the end of this year and early next year.
Actively preventing and resolving risks in key areas is still one of the key tasks. The Report proposes to strengthen the performance management of special debt project funds and enhance the allocation of bond funds and service efficiency. At the same time, strengthen supervision and accountability, and continue to focus on preventing and resolving the risk of hidden debt of local governments.
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