China's central government borrows at record levels

China’s central government has borrowed at record levels to finance more spending and ease provincial debt burdens. The amount of government bonds sold this quarter, excluding maturities, reached 277 billion yuan ($40 billion), according to Bloomberg calculations, the most during the same period since the official ChinaBond website began publishing data in 1997. Gross issuance of bonds in the first three months rose 35 percent from a year earlier, to 2.1 trillion yuan. Beijing outlined plans in China’s 2023 budget, announced at the National People’s Congress earlier this month, to increase the central government’s borrowing by about 20 percent from last year to finance a slightly larger fiscal deficit and help provinces cope with rising fiscal stress. It also plans to expand investment in infrastructure upgrades such as improving urban drainage systems. Policymakers have signaled they will rely on a post-Covid recovery in consumption to accelerate growth, which they target to reach around 5% for this year.