China Daily recently reported that China is planning that, later this year, the first group of ten provinces and cities will be allowed to issue their own bonds. The bonds will be modeled after the “Western municipal bonds.” The plan includes Zhejiang, Jiangsu, Shandong, Guangdong and two other less-developed provinces. It also includes the cities of Beijing, Shanghai, Shenzhen, and another coastal city. The report estimated that the announcement would be made near the end of May and that the bond issuance might happen in July. Currently, China’s local governments are not allowed to issue bonds directly, at least not officially. The new plan will also include a rating system for the local bonds. However all these are still pending approval of the National People’s Congress (NPC). The scale of this first wave of local bonds is still unclear.
Source: China Daily, May 19, 2014