China\u2019s economic stimulus measures are receiving close attention, not just because of the impact of its huge economy on the global economy, but also because of its effects on global carbon emissions.<\/p>\n\n\n\n
The 2020 Twin Sessions \u2013 the most important Chinese political meeting of the year<\/a> \u2013 starts today, and the announcement of a huge economic recovery programme is as good as certain<\/a>. But how big will it be, and how much will go to carbon-intensive infrastructure? Will it derail China\u2019s ongoing low-carbon transition, or set it on a track to both economic and environmental success?<\/p>\n\n\n\n Despite the epidemic, the central government has repeatedly stressed<\/a> the importance of annual economic and social targets \u2013 the country\u2019s determination to achieve a xiaokang<\/em>, or moderately well-off, society by 2020 has not wavered. The xiaokang<\/em> goals include a doubling of 2010 GDP by this year, and intensive poverty reduction.<\/p>\n\n\n\n Editor’s note:<\/p> Updated 2020\u00a0quotas for central and local government bond issuance\u00a0were\u00a0approved by the National People’s Congress on 28 May. Please refer to this\u00a0China Dialogue article<\/a>\u00a0for details.<\/p><\/div><\/div>\n\n\n\n Against this background, the government has been rolling out financial firepower. One focus has been on boosting the issuance of special bonds by local governments. These are used to overcome shortages of funding for specific projects, stimulating economic growth<\/a> by leveraging investments and promoting infrastructure construction.<\/p>\n\n\n\n The Ministry of Finance has issued new bond quotas for local governments three times this year. An additional 1.1 trillion yuan<\/a> (US$155 billion) in quotas were assigned in the first quarter, with a further 1 trillion yuan brought forward to April. By the end of May, local special bonds worth 2.29 trillion yuan are expected to have been issued \u2013 approaching the 2.59 trillion total for 2019. Higher levels of local and central government debt quotas may also be approved at the Twin Sessions. Analysis indicates the value of local government special bonds issued this year is set to pass 4 trillion yuan<\/a> and perhaps double last year\u2019s figures.<\/p>\n\n\n\nLocal bonds used for \u2018traditional\u2019 infrastructure<\/h2>\n\n\n\n