China Scraps Trial of Local Government Bonds, Studies Risks
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China has shelved plans to allow local governments to sell bonds directly following a trial program last November, a week after increasing scrutiny of default risks at regional investment companies.
A draft revision to the budget law that would have allowed the authorities to sell bonds within an approved quota was removed in the second reading of the bill by the legislature, the official Xinhua News Agency reported. The central government will continue to sell bonds on their behalf, it said.