Local governments in China have been injecting into capital into struggling smaller banks, seeking to contain spillover risks from a deepening property crisis and only slowly recovering economy.

  • Local govmts have sold record amounts of Special-purpose bonds this year
  • Special-purpose bonds are a form of off-budget debt financing used by local governments in China
  • Local governments plan to use the proceeds of the latest bond sales to purchase equity or convertible bonds from smaller banks, most of them state-owned, effectively recapitalising them
  • have raised 152.3 billion yuan (US$21.05 billion) via such bonds so far in 2023

Info comes via Reuters, link here for (much) more

China Mortgages
China Mortgages