China steps up local gov't bond issuance to support key areas, major projects

BEIJING -- China ramped up the issuance of special local government bonds to support economic growth and maintain reasonable and ample liquidity in the market, according to a notice on local government bonds issued Monday.

Local governments and financial institutions are encouraged to use special bonds and other market-based financing methods to support key areas and major projects such as the coordinated development of the Beijing-Tianjin-Hebei region and the construction of the Yangtze River Economic Belt.

The notice urged the implementation of debt repayment obligations. The provincial governments shall take full responsibility for the repayment of the special bonds.

It also called for a higher degree of marketization of local government bonds pricing and increasing diversification of the investors.

Institutions such as commercial banks, insurance companies and fund firms as well as individual investors are encouraged to invest in local government bonds, it said.