MNI China Press Digest June 26: Trade-ins, Local Bonds, Debts

Highlights from Chinese press reports on Wednesday:

• Officials will accelerate trade-in schemes for old products after China recycled 55.6% more cars in May year-on-year, according to Xu Xingfeng, director at the Ministry of Commerce's Consumer Promotion Department. So far, local governments have arranged about CNY9 billion to support automobile trade-ins, while the Ministry of Finance has issued CNY6.44 billion. From January to May, major e-commerce platforms increased trade-in sales of home appliances by 81.8% y/y. (Source: 21st Century Business Herald)
• Local-government bond issuance will peak in Q3 with over CNY2 trillion deals planned to be issued, which will greatly support infrastructure investment, China Securities Journal reported. A total of CNY2.36 trillion bonds are planned to be issued by 27 regions, with Sichuan, Guangdong, and Hunan provinces all exceeding CNY100 billion, the newspaper said. National Development and Reform Commission said it has finished the screening of 2024 local special-bond projects, which means physical workload will be form at a faster pace and infrastructure investment will keep stabilising the economy, said Feng Ling, head of research at Golden Credit Rating.
• Local governments have made phased progress in resolving implicit debts, but illegal borrowing has not been completely curbed, Caixin reported citing a report by the National Audit Office. Some regions with high debt levels still relied on high-interest, non-standard borrowing, or overseas bonds to sustain payment of previous non-standard private placement bonds issued by local-government financing vehicles, Caixin said. The audit report also disclosed for the first time that state-owned enterprises in 24 regions raised more than CNY11.2 billion implicit debts by illegally issuing financial products on local financial asset exchanges or public fund-raising.