BEIJING - China's local governments issued a net 1.69 trillion yuan ($238.49 billion) in special bonds in the first seven months of the year, the finance ministry said on Thursday, accounting for 78.4% of the annual quota.

Beijing has announced a quota of 2.15 trillion yuan for local governments to sell special bonds this year to fund infrastructure projects, as policymakers try to shore up the slowing economy.

For July alone, net issuance of the bonds totaled 299.7 billion yuan, the ministry said in a statement on its website.

Policy insiders said local governments may be allowed to sell more bonds, but this could only be considered if the economy continues to falter and more funds are needed to keep projects going once the quota is used up, insiders said.

China accelerated local bond issuance in recent months in order to complete the quota the end of September.

Beijing is counting on a recovery in infrastructure investment to help stabilise the world's second-largest economy as the U.S.-China trade war drags on, weighing on its vast manufacturing sector and hurting business confidence.

($1 = 7.0862 Chinese yuan renminbi)

(Reporting by Beijing Monitoring Desk, Stella Qiu and Kevin Yao; Editing by Simon Cameron-Moore) ((yifan.qiu@thomsonreuters.com; 86-10-66271289;))