Special bond project funds refer to bonds issued to raise funds for the construction of specific projects, and are currently an effective measure for coordinating fiscal expenditure and optimizing government investment. Newly added special bonds must be used for project construction and cannot be used to repay debts.

In May 2020, the Office of the Ministry of Culture and Tourism issued the "Notice on Making Good Use of Local Government Special Bonds", which mentioned that local cultural and tourism administrative departments should proactively communicate and coordinate with local finance and development and reform departments to strive to include the cultural and tourism industry in the scope of key support for local government special bonds (hereinafter referred to as "special bonds") in various localities. Major projects in the cultural and tourism field can be applied for from cultural tourism and other already clearly defined key areas, or, depending on the characteristics of the project, from areas related to cultural and tourism, such as ecological environmental protection, agriculture, forestry, water conservancy, municipal administration, and industrial park infrastructure.

In February 2021, the Office of the Ministry of Culture and Tourism issued the "Notice on Further Making Good Use of Local Government Special Bonds to Promote the Construction of Major Projects in the Cultural and Tourism Field", which mentioned that cultural and tourism administrative departments at all levels should give full play to the positive role of the key project databases of cultural and tourism at all levels, actively seize the opportunity to apply for newly added special bonds, and strive for more special bonds to be used for the construction of major projects in the cultural and tourism field.

The "14th Five-Year Plan" for Tourism Development also clearly states that the Ministry of Finance should support the strengthening of tourism public service facility construction and tourism public welfare publicity and promotion through existing funding channels, include qualified tourism infrastructure construction projects in the scope of support for local government bonds, and promote government-society cooperation in the tourism field.

On September 29, 2023, the General Office of the State Council issued a notice on "Several Measures to Unleash Tourism Consumption Potential and Promote High-Quality Development of the Tourism Industry", which pointed out: Make good use of fiscal funds from various relevant channels and strengthen policy coordination and cooperation. Support tourism infrastructure construction through existing special funds such as central budgetary investment. Support localities in improving tourism public service levels, strengthening tourism publicity and promotion, and promoting the construction of national cultural and tourism consumption pilot cities and demonstration cities through channels such as tourism development funds and central subsidies for the construction of local public cultural service systems. Include qualified projects in the tourism field in the scope of support for local government special bonds.

As of February 23, 2024, all 31 provinces have disclosed their budget reports and announced the quota for advance local bonds. According to the compilation, the total quota for advance special bonds and general bonds obtained by the 31 provinces in 2024 is 2.28 trillion yuan and 43.2 billion yuan respectively, both of which are 60% of the newly added special bonds and newly added general bonds in 2023, meaning that the regulatory authorities have issued the advance quota according to the upper limit authorized by the Standing Committee of the National People's Congress.

In December 2024, the General Office of the State Council issued the "Opinions on Optimizing and Improving the Management Mechanism of Local Government Special Bonds", which pointed out that in terms of the scope of special bonds used as project capital gold, "positive list" management will be implemented, including new infrastructure for emerging industries such as information technology, new materials, biomanufacturing, digital economy, low-altitude economy, quantum technology, life sciences, commercial aerospace, and Beidou; computing power equipment and auxiliary equipment infrastructure; safety and intelligent transformation of traditional infrastructure such as highways and airports; and health, elderly care, childcare, and provincial-level industrial park infrastructure will be included in the scope of special bonds used as project capital gold ("Industries where local government special bonds can be used as project capital gold"). Increase the proportion of special bonds used as project capital gold. For each province, the upper limit of the scale of special bonds that can be used as project capital gold will be increased from 25% to 30% of the scale of special bonds used by the province for project construction.

Special bonds must be used for infrastructure and public service projects with certain returns.

1. Cultural and Tourism Category

Cultural projects supported include cultural centers, museums, botanical gardens, libraries, art galleries, intangible cultural heritage centers, etc. Parking lots can be built as supporting facilities, with key support for national cultural park projects.

The construction of national cultural parks, cultural streets, and sightseeing tourism projects includes the construction of tourism infrastructure, supporting service facilities, visitor centers, parking lots, etc. in scenic areas.

Construction of tourism public service support facilities. Construction content includes: visitor information centers, regional tourism emergency rescue bases, urban tourism distribution centers and sub-distribution centers (including distribution points), tourism traffic guidance signage systems, and tourism data centers.

Key scenic area infrastructure construction: connecting roads from scenic areas to main traffic arteries, roads within scenic areas, pedestrian walkways within scenic areas, parking lots, toilets, power supply facilities, garbage and sewage treatment facilities, fire protection facilities, security monitoring facilities, and interpretation and education systems, etc.

There is no restriction on the A-level rating of scenic areas. Three types of projects are not supported: first, projects such as hotels, homestays, and workers' cultural palaces; second, image projects such as cultural celebrations, landscape improvements, large sculptures, landscaping, and street lighting, and commercial facilities such as theme parks are not supported; third, the construction of red cultural tourism projects. These three categories must be carefully reviewed during the application process.

2. Cultural and Tourism Integration Category

1) Combined with rural revitalization, vigorously develop sightseeing agriculture and leisure agriculture, cultivate creative agriculture such as pastoral artistic landscapes and balcony agriculture, encourage the development of new agricultural formats such as customized agriculture, exhibition agriculture, crowdfunding agriculture, family farms, and family ranches with tourism functions, and create beautiful leisure villages with integrated development of the primary, secondary, and tertiary industries.

2) Combined with the field of science and education, develop red tourism with the main theme of promoting socialist core values, and actively develop research and study tourism products such as patriotic education and revolutionary tradition education and national conditions education. Scientifically utilize traditional villages, cultural relics and historical sites, museums, world cultural heritage sites, and intangible cultural heritage exhibition halls to carry out cultural experience tourism.

3) Combined with the field of sports, actively develop sports parks and national fitness centers that integrate sports and tourism, including small-scale sports complexes, standard track and field tracks and standard sports fields in public stadiums, social football fields, fitness trails, outdoor sports, and public service facilities.

4) Combined with the field of new infrastructure construction, consider new highlights such as smart scenic areas, cloud tourism, and AI cultural tourism, and create models such as "tourism +", Internet celebrity economy, and cultural and tourism complexes.

3. Key Focus Areas

Key focus should be given to projects related to national major regional development strategies, national cultural park construction, industrial cluster construction, tourism public service infrastructure construction, key scenic area infrastructure construction, and museum construction.

Prioritize ongoing projects.

(1) Handling project approval procedures

1. The project implementing entity commissions a consulting company to prepare a project proposal;

2. The project implementing entity applies to the approval bureau/NDRC for project proposal approval;

3. The project implementing entity commissions an engineering consulting company to prepare a project feasibility study report;

4. The project implementing institution applies to the planning bureau for planning site selection opinions;

5. The project implementing entity applies to the land bureau for project land pre-examination opinions;

6. If stability assessment and energy assessment are required, the project implementing institution needs to handle the relevant project approval documents;

7. The project implementing institution applies to the NDRC/approval department for feasibility study report approval;

8. The NDRC/approval department handles the feasibility study report approval document;

9. The project implementing institution obtains environmental impact assessment approval opinions from the environmental protection bureau.

(2) Project Application Stage

1. The project implementing institution commissions a consulting company to prepare a project implementation plan (including a financing self-balancing plan);

2. The project implementing institution commissions an accounting firm to prepare a financial assessment report (or has a consulting company lead the coordination meeting to issue a report);

3. The project implementing institution commissions a law firm to prepare a legal opinion (or has a consulting company lead the coordination of the law firm to issue a report);

4. The project implementing institution submits the project to the NDRC's major project database;

5. The project implementing institution submits the project to the Finance Bureau's bond application system;

6. The Finance Bureau submits the project to the higher-level Finance Bureau, ultimately submitting it to the Debt Management Department of the Provincial Finance Department;

7. The Provincial Finance Department organizes experts for review;

8. The Provincial Finance Department issues a review and inclusion notification.

(3) Project Issuance Stage

1. The Provincial Finance Department is responsible for organizing project materials and preparing special bond information disclosure documents;

2. The Provincial Finance Department commissions a credit rating agency to conduct a credit rating;

3. The Provincial Finance Department publishes the special bond information disclosure document on the China Bond Information Network;

4. The Provincial Finance Department releases special bond bidding information;

5. Underwriter bidding and underwriting;

6. The Provincial Finance Department publishes the winning bid results on the China Bond Information Network;

7. Funds are transferred from the Provincial Finance Department to the municipal finance/county finance;

8. The local finance department allocates project funds to the project unit.

(4) Bond Duration Management

1. Special bond duration information disclosure;

2. Special bond performance evaluation;

3. Interest repayment;

4. Principal repayment.

Before the issuance of special bonds, the main documents that need to be prepared by third-party professional institutions are:

(1) Project feasibility study report;

(2) Project revenue and financing balance plan;

(3) Financial assessment report;

(4) Legal opinion;

(5) Credit rating document (credit rating documents are generally coordinated and prepared by the provincial finance department).

Project Review: In addition to project approval, feasibility study report and approval, planning site selection and land pre-examination opinions, and environmental impact assessment approval, the following materials can demonstrate that the project has reached a high level of maturity:

(1) Balancing project profitability and public welfare. Preconditions for special bonds in the culture and tourism field are public welfare projects, strict correspondence between bond issuance and use, limited debt repayment sources, self-balancing of revenue and financing, and asset supervision and management.

(2) The project needs to complete preliminary work such as land acquisition, site selection, and environmental impact assessment, and obtain project approval (or project proposal) approval and feasibility study approval. It is required that the planned issuance scale of the project is reasonable, there is no situation of illegally increasing the implicit debt of the local government, the issuance period of the project should match the construction progress, capital needs, self-balancing of financing and revenue, and whether the project revenue can cover the principal and interest of the bonds.

(3) Prepare project planning and reserve work in advance. Establish a tiered pattern of "implementing a batch, applying for a batch, reserving a batch, and planning a batch." Local culture and tourism departments should plan and arrange key projects to be implemented in advance, establish a reserve project database for culture and tourism special bonds, guide major projects in the culture and tourism field to do a good job in special bond application work, actively strive for special bond funding support, and promote the early start of project construction to form physical workload.

(4) Pay attention to scientific strategies and local conditions during the project application process. Major projects in the culture and tourism field can be applied for from the already clearly defined key areas such as culture and tourism, or, according to the characteristics of the project, from areas related to culture and tourism such as ecological environment protection, agriculture, forestry, water conservancy, municipal administration, and industrial park infrastructure.