China's Risk Crackdown Is Rattling its Municipal Bond Market
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- Municipal debt ‘first to be ditched’: China Merchants trader
The Chinese national flag hanging in sunshine from the Bank of China's headquarters, on 13th February 2017, in the City of London, United Kingdom. The Bank of China (BOC) BOC opened its first overseas branch in London in 1929.
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China’s deleveraging campaign is providing a reality check to the fledgling municipal bond market.
Set up in 2015 to bring transparency to local-government borrowing practices, the new market benefited from the perception that Beijing had the provinces’ backs, with yields largely on par with the sovereign despite some weak municipal balance sheets.