Xi Jinping’s ‘city of the future’ just had a record quarter for construction financing

Five batches of ultra-long special bond sales raked in several billion yuan for the Xiongan New Area, as development of ambitious megacity speeds up

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Hundreds of billions of yuan have been invested in the Xiongan New Area’s construction, including roads, residential blocks, schools, hospitals and a high-speed railway station. Photo: Xinhua

Published: 9:00am, 28 Nov 2024

To fund a futuristic megacity that has been one of President Xi Jinping’s pet projects for the better part of a decade, China has accelerated the issuance of ultra-long special bonds – intent on ensuring that the sprawling city is “basically completed” by 2035.

The government of the Xiongan New Area, which is about 100km (62 miles) south of Beijing, sold five batches of the government bonds – all earmarked explicitly for the region’s development – in the third quarter.

The five batches raised more than 14 billion yuan (US$1.9 billion), marking the busiest quarter for construction financing in the six years that the bonds have been issued for the development zone, located in Hebei province.

Most of the bonds will take 30 years to mature, with the annual coupon rate ranging from 2.23 to 2.52 per cent, according to Celma.org.cn, a national platform for local government debt information disclosures. A batch of 20-year bonds was also issued, with a yield of 2.47 per cent.

The coupon rates are very close to those of China’s treasury bonds with the same maturity duration.

Since being dubbed in 2017 as China’s “city of the future”, Xiongan has sold a total of 246.3 billion yuan worth of the special-purpose bonds.

State media reported last month that more than 760 billion yuan had been invested in the city’s construction, including roads, residential blocks, schools, hospitals and a high-speed railway station connecting the capital city of Beijing and the mega-port city of Tianjin.