China's Inner Mongolia Autonomous Region announced on Wednesday that it is taking steps to alleviate debt pressures by issuing special government bonds. This move is part of Beijing's efforts to manage financial risks stemming from mounting local government debt.
According to government filings, the northern China region plans to issue special refinancing bonds worth 66.32 billion yuan ($9.07 billion) to repay government debt owed to companies that were issued before 2018.
In June, The Wall Street Journal reported that Beijing was considering issuing special treasury bonds totaling approximately 1 trillion yuan (equivalent to $140 billion) to assist indebted local governments. These special bonds would be utilized to finance infrastructure projects and facilitate debt repayment at the local government level.
Chinese media sources recently revealed that regulators have approved the issuance of special refinancing bonds and that 12 high-risk regions will receive preferential bond quotas.
During a key decision-making meeting held in July, China's leadership vowed to implement measures aimed at addressing risks arising from local government debt. Several provincial governments have already submitted their own plans to Beijing, as reported by Chinese state media.
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