BEIJING — China's local government bond issuance registered steady expansion in the first five months of the year amid the country's efforts to encourage the economy, official data showed.

Local governments in the country issued nearly 3.2 trillion yuan (about $450 billion) worth of bonds from January to May, up 65.1 percent year-on-year, according to the Ministry of Finance (MOF).

In May alone, local government bond issuance reached a record high of over 1.3 trillion yuan, data from the MOF showed.

Financing costs at the local level were reduced, with the average interest rate of the bonds issued in the first five months falling 20 basis points from last year to 3.27 percent.

The average term of the bonds issued during the period was 15.2 years, 4.9 years longer than that of 2019. The longer maturity better meets the financing demands of long-term transport and water conservancy projects, the ministry said.

Funds raised through new special local government bonds flowed to major projects in the sectors of infrastructure construction and public service, contributing to investment expansion and the promotion of economic and social development.

Amid contraction of global trade and investment, China aims to spur effective domestic investment by planning the issuance of more special local government bonds, with priority given to new infrastructure, new urbanization initiatives and key projects spend.