China has authorized its policy banks to issue at least RMB 1.0 trillion (or ~$160B USD) of long-term special financial bonds to fund infrastructure projects over three years, with the first batch of RMB 300 billion could be issued soon, notes BofAML. Sylvia Sheng and team of Bank of America Merrill Lynch in their August 10, 2015 “GEMs Daily- Asia Edition” report, note the infrastructure bond plan would be very different from the massive fiscal stimulus introduced in 2009. Bigger role for China's policy banks to boost infrastructure spending Sheng and colleagues at BofAML point out that funding for infrastructure projects has been under pressure as Beijing reins in local government funding via LGFVs, and interest from private capital in public-private partnership is lackluster. The analysts note in the current sluggish real estate and manufacturing environment, infrastructure investment growth moderated to 19.2% in 1H15 from 20.3% in 1H 2014. The BofAML analysts anticipate the policy banks will play a... More