China will further open its financial markets with the latest move to remove restrictions for foreign banks to participate in the underwriting of local government bonds.
China’s Ministry of Finance issued a statement regarding the further liberalization of markets. According to a «Reuters» report citing the statement, the move would help expand sales channels and the investor base for local government bonds while promoting the internationalization of the yuan and China’s bond market.
The China subsidiaries of Deutsche Bank and Bank of East Asia were highlighted in the statement as foreign lenders that have already participated in domestic bond underwriting.
In addition, the ministry said it would also support agencies nationwide to revise and improve underwriting rules for local government bond issuances.
In 2019, local government bond issuance totaled 4.36 trillion yuan ($630 billion) compared to 4.17 trillion yuan ($600 billion) in the previous year.
