Researches & Commentaries
Hong Kong, 27 July 2021 -- China Chengxin International Credit Rating Co., Ltd. (“CCXI”) issued a report entitled “Slower-than-expected Special Bond Issues Delay the Effect of Investment Stability and Particular Attention to Potential Risks Is Required in the Context of Normalized Management: Review and Outlook of Local Government Special Bonds in H1 2021”, According to the report, According to the Report, local government special bonds, as an important source of funds for infrastructure construction, continue to greatly fund the efforts to bolster up weak links and adjust the economic structure in the post-pandemic era. However, due to the late release of advance quotas and the increasingly tightened reviews, special bonds were issued and supplied in the first half of 2021 at a pace slower than in previous years. The special bond market will be expanded faster in the second half of the year. Therefore, their driving force on infrastructure investment may be felt gradually in the third quarter of the year. In addition, with further headway made towards the normalized management of special bonds, the efficiency of capital utilization will increase over time. The Report also reminds that it is still necessary to track the potential risks of special bonds at a time when local economies still face financial pressure prior to a full recovery.