China assigns 550 billion yuan of unused local borrowing

China's finance ministry on Friday assigned local governments 550 billion yuan, about $82 billion, of unused borrowing budget.

The ministry assigned 300 billion yuan to strengthen the day-to-day budgets of local counties and districts. The remaining 250 billion yuan was given to areas with projects ready for financing, with those in larger provinces prioritised.

Projects already under way are first in line for a funding injection. New initiatives are meant to focus on six networks: a national program for water, power grids, computing power, communications, city pipes and logistics, and other priority areas.

Until local governments sell the bonds, none of the 550 billion yuan is money in the economy. The ministry said it will press local authorities to line up projects already in reserve so the bonds have somewhere to go once sold, and to sell and pay the money out so building can start quickly, though it named no date.

Same tool, different aim

The 550 billion yuan is borrowing local governments had not used, under debt limits lawmakers approved in March. The new borrowing in the 2026 plan is a different total: a local deficit of 800 billion yuan and a quota of 4.4 trillion yuan for new special bonds, the kind tied to projects. The ministry did not say whether bonds sold under the unused quota come on top of those amounts.

Officials utilized unused borrowing allowances as a year-end push in 2024 and again last October, when the ministry assigned 500 billion yuan. Beijing said it would help clear local government debt and repay what provincial and district governments owed companies.

China's statistics bureau is scheduled to publish third-quarter economic growth figures on Monday, October 19, in Beijing, Sunday evening in New York. In March, Premier Li Qiang set a target of 4.5% to 5%.