The push this week by China’s government to develop its onshore bond market has huge implications.
On Monday, the local government of Guangdong Province sold Rmb14.8 billion $2.4 billion worth of bonds, the country’s first local government bond in the name of the local authority.
Previously, six local governments could issue bonds but conditionally and only in the name of the Ministry of Finance. The six are Shanghai, Zhejiang, Guangdong, Shenzhen, Jiangsu and Shandong.
However, on May 19 the MoF for the first time allowed the local governments to tap the bond market under their own steam and included four more cities and...