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$37.5-billion yuan bond boost to Hubei Province

(ATF) Hard-hit Hubei Province has special bonds worth some 261-billion yuan ($37.5 billion) ‘in place’ for urban development, according to Hubei Satellite TV.

As ATF reported yesterday the central government is throwing funds towards the virus- and flood-ravaged Yangtze river ‘belt.’

Hubei Province is technically at the centre of the dramatic historic flooding that has struck central China over the last three months. It was also the epicentre of the coronavirus, which broke out in Hubei’s capital, Wuhan, early this year (or late last year).

Currently the area has a heatwave, as Wuhan is known for its very high temperatures in summer months.

The new funding comes from a mix of the new local government bonds issued by the central government and special anti-epidemic treasury bonds.

Various infrastructure projects have been announced, such as the building of an inter-city subway line in the province to connect Wuhan and Ezhou.

Zhu Lifang, deputy director of the Finance Bureau of Ezhou Gedian Economic and Technological Development Zone, told reporters that due to the impact of the epidemic, Gedian district’s fiscal revenue has been reduced by about one-third.

In order to support the resumption of work and production in Hubei, the central government has opted to issue new local government bonds and special anti-epidemic treasury bonds to help the province.

This year, the central government has issued anti-epidemic special treasury bonds and new local government bonds for Hubei. The total limit reached 261.4 billion yuan, an increase of 119.9 billion yuan from 2019.

Hubei officials had issued 115.233 billion yuan in new government bonds, as of the end of July. Of these, ordinary bonds totalled 30.5 billion yuan, while special bonds attracted 84.73 billion yuan. The average bond length is 13.9 years.

This year, Hubei will also issue an additional 102.37 billion yuan of new government bonds, and invest the proceeds mainly in “Ten Major Projects” determined by the provincial party committee.

Chris Gill

With over 30 years reporting on China, Gill offers a daily digest of what is happening in the PRC.


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