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Friday, October 31, 2008

China may allow local govts to issue bonds

This is going to be a major policy change.

China may allow local govts to issue bonds

BEIJING (XFN-ASIA) - The finance ministry is drafting a plan to allow local governments to issue bonds, a practice currently not allowed under Chinese law, the 21st Century Business Herald reported.

The report cited sources close to the matter as saying that the plan has been submitted to the State Council for approval.

In addition, the report said an office in charge of local government debt management has been established at the ministry's budget management department, the report said.

China is likely to set a high threshold for local governments to issue bonds, and only provincial-level governments may be allowed to do so in the early stages, the report added.

No further details were given.

bjburo@xfn.com

http://www.forbes.com/afxnewslimited/feeds/afx/2008/10/31/afx5630110.html

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