Chinese authorities alow companies to issu short-term bills

It should be a noteworthy development of bond market in China.

Chinese kick-start bond market
>By Richard McGregor in Beijing
>Published: November 14 2005 22:04 | Last updated: November 14 2005 22:04
>>

China's central bank has quietly kick-started the development of a substantial domestic bond market, allowing companies to get around longstanding restrictions on corporate debt by issuing short-term bills.

I have not studied this but circum

More than 30 companies have issued so-called short-term corporate bills since the People's Bank of China, the central bank, began sponsoring such products in May and allowing them to be traded on the inter-bank bond market.

The short-term issuances circumvent the main impediment to the development of a bond market - the restrictions imposed on potential issuers by the National Development and Reform Commission, the regulator.

The NDRC, previously the planning commission, has stifled issuances in the past decade by requiring companies to get bank guarantees for any bonds along with meeting other difficult conditions.

To require bank guarantee might not be good in the long-term. Develoing credit rating agencies should be necessary.