Bonds help to give GDP growth a shot in the arm

China will increasingly rely on longer-term and special-purpose government bonds to finance construction and stabilize the economy, preventing the GDP growth rate slowing to a multi-decade low in the second half of this year, said economists.

In June, local governments issued 717 billion yuan ($104 billion) in special bonds, the record so far in 2019, accounting for nearly one-third of the total special bond issuance in the first half, the Ministry of Finance said on Tuesday.

During the January to June period, 64.8 percent of the funding from special bonds was directed toward fixed-asset investment, especially for infrastructure construction and shantytown renovation, said Hao Lei, head of the ministry's Budget Department.