SUB-SOVEREIGNDATA REPORTS 18 NOVEMBER 2015TABLE OF CONTENTSOnshore Bond Market 2Fiscal Situation 4Real Estate Market 5Economic Statistics 6Background Tables 8Policy Updates 14Moody's Related Research 15ANALYST CONTACTSNicholas Zhu, Ph.D. 86-10-6319-6536 VP-Senior Analyst nicholas.zhu@moodys.comDaisy Y Lu 86-10-6319-6577Associate Analyst daisy.lu@moodys.comDebra Roane 612-9270-8145VP-Sr Credit Officer debra.roane@moodys.comSub-SovereignChinese Regional and Local Government Debt and Finances SnapshotOur quarterly chart and data round-up of financial and debt trendsRegional and local governments (RLGs) in China are responsible for most infrastructure investment such as roads, bridges, tunnels, and municipal utilities for water, gas, heat, electricity, and telecommunication. This infrastructure investment catalyzes local investment spending such as expansion of manufacturing capacity. Total investment on the local level accounted for 95.7% of total national investment in the first three quarters of 2015.Local investment in the first three quarters of 2015 grew by 10.7% from the same period in 2014, down from 15.9% for the same period from 2013 to 2014. This in turn reduced growth in total investment to 10.3% from 15.7% a year earlier (see Exhibit 1). The slowdown in investment growth will in turn weigh on economic growth.Exhibit 1Investment in China is predominantly a local affair (year to date)Source: National Bureau of StatisticsMOODY'S INVESTORS SERVICE SUB-SOVEREIGNThis publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.2 18 NOVEMBER 2015 SUB-SOVEREIGN: CHINESE REGIONAL AND LOCAL GOVERNMENT DEBT AND FINANCES SNAPSHOTOnshore Bond MarketExhibit 2Provinces have issued over RMB2.9 trillion bonds as of October, with 82% used to refinance existing debt.Source: Bond prospectusesExhibit 3Only 3 issuers have privately placed more than half of their bonds.Source: Bond prospectusesExhibit 4Only 9 provinces have issued more than half of their bonds with maturities of 5 years or shorter.Source: Bond prospectusesMOODY'S INVESTORS SERVICE SUB-SOVEREIGN3 18 NOVEMBER 2015 SUB-SOVEREIGN: CHINESE REGIONAL AND LOCAL GOVERNMENT DEBT AND FINANCES SNAPSHOTExhibit 5Six provinces have refinanced all of their estimated debt due in 2015 through bond issuance as of October.Source: Bond prospectuses and provincial finance bureausExhibit 6Secondary market yield spreads over sovereign bonds narrowed to an average 40 basis points in September-October from an average of 46 basis points in July-August.Source: China Central Depository&Clearing Co., Ltd.Exhibit 7Publically auctioned bonds as of October revealed gradual differentiation of risk pricing across provinces.Source: Bond prospectusesMOODY'S INVESTORS SERVICE...
