On May 9th, the Ministry of Culture and Tourism (MCT) issued a Notice on Effective Adoption of Local Governments’ Special Bonds in a bid to promote the implementation of major cultural and tourism projects, stabilize investment in the industry, enhance confidence and help resume business. The notice encourages cultural and tourism departments to use dedicated local government bonds to support major cultural and tourism projects in their regions.
The notice urges local cultural and tourism administrative departments to actively communicate with local finance, development and reform departments and make cultural and tourism industry a key support program under local governments’ special bonds. They should apply for the governmental financial support during the centralized application period, and complete the application for qualified major projects in the cultural and tourism fields to gain financial support through local bond programs.
The notice made it clear that local governments should take a systematical and localized approach, in compliance with relevant bond scheme’s standards and requirements, to define potential projects as significant revenue-generating projects and identify their category based on the projects’ attributes. Such projects can be defined broadly as cultural tourism, and additionally by their features, such as ecological environment protection, agriculture, forestry and water conservancy, municipal and industrial park infrastructure.
The local governments’ special bonds are a product and result of recent reforms of investment and financing system, according to the notice. It gives local governments an avenue to legally borrow in the mode of "collective borrowing and repayment", as a new mean to raise funds other than tax revenues.
As of the end of March, 23 local governments had issued special bonds in support of the cultural and tourism sectors, raising a total of RMB 13.259 billion (USD 1.87 billion), according to the China Central Depository & Clearing (CCDC).