Source: Bloomberg
The second working day of the Year of the Lunar Lunar Rabbit, the Chinese Ministry of Finance announced the data of local government bonds and debt balance data as of the end of last year.Against the background of insurance growth, the market has been expected to have greatly expanded local special bonds. It is still worth noting that multiple indicators in the data have exceeded the trillion -level integer gateway and set a historical high.
Among them, the scale of local bonds exceeded 1 trillion yuan for the first time, and the number of new special debt in the year exceeded 4 trillion yuan for the first time, and the balance of local government debt has continued to grow rapidly in the past few years.35 trillion yuan.
"Interest payment in the 2022 record is the result of the expansion of the scale of local government debt," Xie Dongming, director of research director of the Greater China District of Overseas Chinese Bank, said in an interview that given that local government debt accounts for more than 110%, it is close to 110%, which is close to120%of the upper limit of international warning, local governments have limited space for further leverage.
Looking back in the past five years, the local government bond market has become the largest variety in the domestic bond market. It has played a huge role in ensuring expenditure, supporting infrastructure, and support for the underlying economy.Risks such as debt burden are increasing.Considering the needs of economic growth in the bottom of the way, the Central Economic Work Conference at the end of last year must make active fiscal policies. Under this guidance, the market still has higher expectations for the new local special bonds this year.
In 2022, the scale of local bonds in China exceeded 1.1 trillion yuan, an increase of more than 70%over four years ago.Payment pressure is the last constraint of local government's explicit debt.According to the local government debt risk emergency response plan issued by the State Council in 2016, "the municipal and county government's annual general debt pay expenditure exceeds 10%of the general public budget expenditure of the year, or the special debt interest payment expenditure exceeds the government fund budget expenditure of 10%of the year.Yes, we must start the fiscal reorganization plan. "
Guo Sheng Securities Analyst Yang Yewei in the report Using the scale of special debt payments, in addition to the government fund expenditure measured the special debt payment pressure, it is said that among 261 prefecture -level cities across the country, 34 prefecture -level city interest rates are greater than that20%, 89 prefecture-level city interest payments are between 10%-20%, and most prefecture-level cities in Xinjiang Autonomous Region, Qinghai Province, Yunnan Province, Heilongjiang Province, and Inner Mongolia Autonomous Region are greater than 10%.
The surge in the scale of interest payments comes from the rapid expansion of local debt balances in the past few years.At the end of 2022, the balance almost doubled from 5 years ago, up to 35 trillion, and the year -on -year growth rate was as high as 15%.According to the data of the Ministry of Finance, last year's local public budget and government fund budgets totaling revenue in this level totaling was only 18.3 trillion yuan.China sets up the provincial debt rate early warning standards at 120%of its "comprehensive financial resources".Comprehensive financial resources are usually regarded as the sum of general public budget, government fund budget income, and transfer payment from the central government.
During the expansion of local debt, as a weapon supporting infrastructure, the amount of special debt has increased significantly from 1.35 trillion yuan in 2018 to around 3.7 trillion yuan in nearly two years.In the event of a special bond limit of 100 million yuan, the actual number of new special bond issuance exceeded 4 trillion yuan for the first time, which also led to the total issuance of new local bonds to the record of 4.76 trillion yuan.
As the balance of local debt increases, how to better cope with the debt repayment pressure of explicit debts is also placed in front of the Ministry of Finance.In recent years, the issuance period of local bonds, especially special bonds, has been obviously extended, and the issuance of bond varieties of more than 10 years has increased significantly.The funds are stable for a long time.According to data from the Ministry of Finance, as of the end of 2022, the remaining average of local bonds rose from 4.4 years ago to 8.5 years ago, of which the remaining average of the special bonds was 10 years.
In the huge scale of local bonds, re -financing bonds are an important part that cannot be ignored.Yang Yewei said that most of the new special bonds issued in 2018 are 5 years, so in 2023, we will usher in concentrated expiration and payment, and most of them may rely on issuing re -financing bonds to continue.
In addition, the Ministry of Finance began to allow re -financing bonds to be used to repay some hidden debt and digest the huge and opaque hidden debt risk of local governments.Although the issuance of 3.1 trillion yuan in 2021 was declining last year, Guo Shuqing, chairman of the CBRC Guo Shuqing, to carry out the orderly development of local government debt replacement earlier this month and promote the optimized debt period structure, which also caused many speculations of the market for follow -up practices.
