BEIJING: China’s proactive fiscal policies have been effective so far, going by the positive results generated by expedited issuance of local government bonds, which has boosted investment in infrastructure and could underpin growth for the year, according to experts.

       Data from the Finance Ministry showed that in the first two months of this year, local government bonds worth some 1.2 trillion yuan (US$189.4bil or RM794.17bil) have been issued, including newly issued local government bonds worth 1.07 trillion yuan (RM708.14bil).

       By the end of February, special local government bonds raised 877.5 billion yuan (RM580.74bil). The pace of issuance was said to be “expedited”, according to insiders of the financial services industry and macroeconomic experts.

       Gao Ruidong, chief economist at Everbright Securities, said that by the end of March, local government bond issuances will likely reach 37% of the year’s total, much faster than that in the January-March period of 2020 and one of the fastest issuances in recent years.

       “The expedited issuance of special local government bonds reflects that this year, fiscal policies have been front-loaded,” he said.

       “Special local government bonds are an important fulcrum in keeping growth stable. Expediting such issuances will better facilitate funding for key projects and catalyse effective investment at the earliest possible time.”

       A circular from the State Council, China’s Cabinet, last week decided on the division of responsibilities on key economic tasks stated in this year’s government work report, which underlined the imperativeness to enhance consistency in macroeconomic policies.

       It said that proactive fiscal policies should be more effective and targeted.

       Policies shall be front-loaded and more forward-looking, and policy tools in the reserves shall be put to use in a timely manner to facilitate stable economic performance. — China Daily/ANN