China Muni-Bond Stalling Shows Debt Threat as Party Meets
This article is for subscribers only.
Two years after China started a trial municipal-bond program, plans to take it nationwide have stalled, leaving local authorities reliant on off-budget funding fueled partly by land seizures.
While authorities added two provinces to the trial this year, a draft budget proposal authorizing national sales with approved quotas was dropped in June 2012 and has yet to be revived. This year’s municipal-bond issuance is equivalent to less than 1 percent of local-government borrowing as of 2010, the last official tally.