Source: Bloomberg
China's local government bonds have been issued sharply in the past few years to support the economy affected by the epidemic. After the debt rate of more than half of the provincial administrative units exceeds the risk warning red line set by the Ministry of Finance, how to effectively control the risk of debt and become theInvestors are concerned about one of the focus of the two sessions this year.
Bloomberg sorted out the provincial financial reports and calculated that as of the end of 2022, at least 17 provincial governments' local debt balance accounted for more than 120%of its comprehensive financial resources; of which, Tianjin's debt balance was its comprehensive financial resources.Nearly three times, ranking first.Comprehensive financial resources usually refer to the sum of general public budgets, government fund budget income, and transfer payment from the central government.
Xu Hongcai, deputy minister of the Ministry of Finance, previously stated that the local government debt rate at the end of 2020 was only 93.6%.The Ministry of Finance stated in that year that it had established a risk early warning index system to set up 120%of the debt rate warning of the provincial government.
Breaking the warning red line may mean that local debt bonding will face more restrictions on regulatory levels. From the perspective of the space of fiscal policy, it will affect the future to further expand to promote economic growth.Official data show that the scale of local debt repayment in 2022 reached 3.9 trillion yuan, which was nearly three times that of 2018.The larger, the on the other hand, the government's income is also squeezed, so that the fiscal resources that can be mobilized are more limited.
"The rise in debt level means that the scale of local governments is larger and the cost of debt repayment is higher," said Goldman Sachs Economist Wang Lisheng, "In the case of a decline in capital returns, the increase in debt scale will also rise.Limit the space for local government to implement a financial stimulus policy. "
Bloomberg found that based on the data of China's local government bond information disclosure platform, it was found that the principal and interest pressures of Tibet and Tianjin last year were about 7 times and 6 times in 2018, respectively, ranking first in the provinces.The scale of Jiangsu, Shandong, Zhejiang, and Guangdong has exceeded 200 billion yuan, ranking among the forefront of the country.
Guosheng Securities Analyst Yang Yewei predicts that the average debt rate of provinces across the country will rise to more than 130%this year.He said that only by the economic recovery and the improvement of fiscal revenue can we reduce dependence on debt and be more capable of resolving debt risks. Therefore, the government's tolerance of local debt levels may be higher.
This week's upcoming National Two Associations will review the main economic goals of this year, including deficit rates and new local debt limits.Bloomberg News previously reported that the amount of special bonds in 2023 may be set at 3.8 trillion yuan, which is below the actual distribution scale of more than 4 trillion yuan in 2022.
The general public budget and government fund budget data of the General Ministry of Finance of Bloomberg showed that due to the influence of epidemic, real estate, and tax reduction, the government revenue created at least the first negative growth in at least 2012, and the expenditure increased by about 3%, The deficit reached a record of 8.96 trillion yuan.
According to the data of the Ministry of Finance, after the large -scale expansion of local debt in recent years, the balance of local government debt at the end of last year has reached 35 trillion yuan, of which the balance of the special debt is close to 2.1 trillion yuan.The pressure from the special debt.
In accordance with the requirements of the Ministry of Finance, special bonds need to be repaid by the income of its investment projects.However, in many places, the income of special debt projects is far from insufficient interest expenditure.Guizhou Province last year's special debt project revenue was 1.9 billion yuan, which was only 10%of its interest expenditure; Jiangsu's special debt project income was less than 3.7 billion yuan, which was less than 9%of its interest expenses.
If the special debt settlement rate is calculated, that is, the repayment of the special bond repay the principal and interest expenditure accounted for the proportion of the total government fund revenue, Tianjin is still ranked first in various provinces, which is more than 150%;Both are more than 80%.
Susan Chu, a senior S & P director, said that when the debt of a local government is close to the early warning line, the review of the central government may become more stringent, and the financial support of the local government's financial enterprises will also become more selective.Essence
Some economists suggest that local leverage, central leverage, or increase more general bonds, and compress the scale of the issuance of special bonds accordingly, because the financing cost of general debt is low.The capital management measures (drafts for comments), which were announced earlier this month, reduced the risk weights of local government bonds. This will increase the scale of commercial banks and help broaden finances.
In addition, this year's central government may also use more policy banks to make financing.Last year, China invested 740 billion yuan of funds, and most of the support projects have started construction.Meng Wei, a spokesman for the National Development and Reform Commission, said last November that these financial instruments played a "positive role" on stable investment.
