Nod for 10 regions to issue bonds
Print Edition
CHINA has allowed 10 local governments to directly sell and repay bonds, the Ministry of Finance said yesterday, while the country’s top economic planner said it would phase out opaque financing vehicles that have built up trillions of yuan in debt.
The local governments of Beijing and Qingdao cities, Jiangxi Province and the Ningxia Hui Autonomous Region are now allowed to directly issue bonds within an annual quota approved by the State Council, China’s Cabinet, instead of depending on financing vehicles set up by the governments for funding.
Previously, Zhejiang, Guangdong, Shandong and Jiangsu provinces along with Shanghai and Shenzhen were able to issue bonds under a 2011 trial.
The 10 local governments are now required to pay their debts on their own and will not be covered by the central government.
In the new notice, local governments are required to obtain assessments from credit-rating companies and disclose “basic information” about the bonds they issue as well as their fiscal and economic conditions.
The ministry has also extended the maturities for potential municipal bonds to five, seven and 10 years, from three, five and seven years earlier.
The National Development and Reform Commission said on Tuesday that the government will eventually phase out opaque local government financing vehicles that were found to have accumulated nearly 20 trillion yuan (US$3.2 trillion) of debts by the end of June last year, nearly doubling the amount from the end of 2010.
“Allowing more local governments to issue bonds directly could reduce risks built up by the financing vehicles as they do not separate funding for the governments and funding for companies,” said Guan Qingyou, chief macro-economic researcher of Minsheng Securities.
“It could also cut borrowing from private funding sources and thus lower borrowing costs for the governments.”
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
