Muni Bond Market Expands in China

10 cities and provinces will be allowed to issue municipal debt under new rules. The ten are Shanghai, Zhejiang, Guangdong, Shenzhen, Beijing, Jiangsu, Shandong, Qingdao, Ningxia and Jiangxi.
China Lets Local Governments Repay Debt to Expand Muni Trial
Provincial and municipal authorities will pay interest and repay the principal of the notes, the Ministry of Finance said in a statement posted on its website today. In the trial that started in 2011, the ministry paid the money on behalf of the regional administrations. It added Jiangxi province, Ningxia region, as well as the cities of Beijing and Qingdao to the pilot program, according to the statement.

Premier Li Keqiang plans to set up a transparent financing mechanism for city construction that will allow local governments to sell municipal bonds directly to investors, according to an urbanization plan for 2014-2020 released in March. Reducing provincial administrations’ reliance on their financing vehicles for fundraising is one of the key reform tasks this year, the nation’s top economic planning agency said in an outline released yesterday.

Chinese here: 国务院批准十省市自主发债(附全文)

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