July 26, 2018 / 10:21 AM / a year ago

China to speed up special local government bond issuance to meet demand

FILE PHOTO: Workers are seen amid steel bars at a construction site of a highway in Zhaotong, Yunnan province, China April 20, 2018. Picture taken April 20, 2018. REUTERS/Stringer/File Photo

BEIJING (Reuters) - China’s special local government bond issuance will accelerate in the second half of this year, and the finance ministry will focus the “proactive” fiscal policy on cutting taxes and fees, the vice-finance minister said on Thursday.

Liu Wei said such a fiscal stance would boost jobs and resolve financing difficulties, and he pledged support to small and medium-sized companies.

China issued more than 300 billion yuan ($44.27 billion)worth of special local government bonds in the first half of the year, a pace which Liu Wei described as “slow”.

China’s cabinet on Monday said China would adopt a more vigorous fiscal policy to help tackle external uncertainties without resorting to strong policy stimulus.

At a briefing in Beijing, Liu stressed the need to meet local funding demand and ensure financing for government projects under construction. 

“While we strictly control implicit debt and require local governments to not illegally raise debt, we must at the same time ‘open the front door’ for raising debt through legal means,” said Liu.

Liu also called for better policy coordination among government agencies.

Reporting by Kevin Yao; Writing by Yawen Chen and Elias Glenn

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