Lo­cal gov­ern­ments may sell mu­nic­i­pal bonds

China Daily (Canada) - - NEWSCAPSULE -

China may al­low lo­cal gov­ern­ments to sell mu­nic­i­pal bonds un­der nar­row pa­ram­e­ters in a move to reg­u­late their bor­row­ing and re­duce sys­temic risk.

Qual­i­fied provin­cial-level gov­ern­ments that win ap­proval from the State Coun­cil, the coun­try’s cab­i­net, will be able to raise some of the funds needed for con­struc­tion projects through bonds, if a draft amend­ment to the Budget Law is ap­proved by the top leg­is­la­ture.

The cur­rent Budget Law, which is some two decades old, bars most debt is­sues by lo­cal gov­ern­ments. But gov­ern­ments at all lev­els have man­aged to raise funds in re­cent years through bank loans or via lo­cal govern­ment fi­nanc­ing ve­hi­cles to pay for a plethora of in­fra­struc­ture projects.

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