According to a research report published by Cathay Pacific Haitong Securities, the pace of issuance of new special bonds by local governments in 2026 is slow, or related to insufficient project reserves. It is expected that the use of special bonds in the fourth quarter may be more flexible to support the expansion of supply, but the long-term pressure will weaken. As of September 11, the annual issuance amount of 3.03 trillion new special bonds was added, accounting for 68.9% of the annual limit of new special bonds; according to the issuance plan, the progress will reach 76.4% by the end of September. Judging from the pace of issuance over the past few years, the annual limit of about 90% is usually completed at the end of September, and special bonds are basically completed at the end of October. The remaining amount of local bonds issued during the year is expected to be 2.28 trillion yuan. The issuance period for the remaining local bonds during the year is around 15.3 years, which is a significant decrease from the previous period. Entering the fourth quarter, it is more difficult for new special bonds to form a physical workload in that year. Some provinces with insufficient project reserves may increase the issuance of special new special bonds, which are more flexible in use.

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