China Said to Draft Plan for Local Governments to Sell Bonds
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China’s finance ministry has drafted a preliminary plan that would allow some provincial and city governments to sell bonds to investors on a trial basis, a person with knowledge of the matter said.
The proposal aims to boost local authorities’ repayment ability, the person said, declining to be identified as the matter is confidential. The local government liabilities fell to 7.1 trillion yuan ($1.1 trillion) as of June 30 after banks reclassified 2.1 trillion yuan as normal corporate credit with sufficient cash flows to meet obligations, the person said.