China weighs fast-tracking bond sale for first time with $220 billion stimulus package to spark economy, report says

• China is considering having local governments fast-track the sale of $220 billion of bonds, Bloomberg reported.
• The bonds would be sold in the second half of 2022, rather than waiting for 2023 to begin, per the report.

China is weighing an unprecedented fast-track sale of special bonds that would speed up fiscal stimulus, $4 reported Thursday, indicating Beijing's concern over the economy.

If it happens, the sale of 1.5 trillion yuan — about $220 billion — in local government bonds would be pulled forward from 2023's quota to the second half of 2022, sources told Bloomberg, marking a first-ever acceleration in the bond issuance.

The debt would bolster infrastructure spending, as it would add 1.1 trillion yuan of additional funds to infrastructure plans announced over recent weeks.

China's economy has stumbled amid stringent COVID-19 lockdowns, which have only recently eased, and the nation is struggling to keep up with its annual growth target of 5.5%. Economists surveyed by Bloomberg forecasted that China's growth will land at about 4.1%.

China assigns local governments a quota of how much debt they can sell each year. Typically, local governments in China don't sell bonds until January 1 when budgets reset for the new year.

But fast-tracking the local bond sales still needs approval by the State Council, as well as the National People's Congress.

"It has been clear for sometime that local governments need more money," Wei Yao, head of research for Asia Pacific and chief economist at Societe Generale, told Bloomberg. "The news today suggest that the central government is still unwilling to expand its own balance sheet, and instead let local governments to bring borrowing quota from 2023, which means a fiscal cliff next year."