IMF Working Papers

China's Local Government Bond Market

By Waikei R Lam, Jingsen Wang

September 28, 2018

Download PDF

Preview Citation

Format: Chicago

Waikei R Lam, and Jingsen Wang. China's Local Government Bond Market, (USA: International Monetary Fund, 2018) accessed December 30, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Local governments play a significant role in China’s public finance and fiscal operations. The size of local government debt has grown rapidly over the past years, exceeding the stock of sovereign debt in China. How does this development compare to other countries and what policies can foster the sound development of the bond markets? This paper finds that despite its rapid growth, the local government bond market is still underdeveloped. Severe impediments—low liquidity, weak credit discipline, structural fiscal deficit in local governments—have become more visible. Reforms to develop a sound local government bond market should harmonize tax and regulations, build liquidity, and advance fiscal reforms to tighten off-budget borrowing and address intergovernmental imbalances.

Subject: Bonds, Economic sectors, Financial crises, Financial institutions, Fiscal risks, Government debt management, Public debt, Public financial management (PFM), Sovereign bonds

Keywords: Bond financing, Bond issuance, Bond market, Bonds, China, Debt risk, Fiscal risks, Government debt management, Local Government, Local government debt, Local government FV, Market hinge, Sovereign bonds, Subnational fiscal balance

Publication Details

  • Pages:

    20

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2018/219

  • Stock No:

    WPIEA2018219

  • ISBN:

    9781484378410

  • ISSN:

    1018-5941

You May Also Be Interested In...

Togo: Public Investment Management Assessment - PIMA and Climate PIMA

December 30, 2024

Zambia: Data Quality Assessment for Public Sector Debt Statistics (September 30–October 4, 2024)

December 30, 2024

Maldives: Mainstreaming Climate Change into Public Financial and Investment Management Green PFM and Climate PIMA

December 30, 2024

Papua New Guinea: Climate Public Investment Management Assessment – CPIMA

December 30, 2024