(Yicai Global) Jan. 7 -- China's Ministry of Finance has asked more of its local regulators to lift restrictions on non-mainland banks' involvement in local government bond underwriting syndicates and wants to encourage more such lenders to join the process.
Banks wholly or partially owned by companies outside the mainland and branches of lenders based outside the mainland should all be able to participate in the underwriting groups, the ministry said online yesterday.
Taiwan-funded Fubon Bank China has already joined the Ningbo and Chongqing government bond syndicates; Hong Kong-owned The Bank of East Asia China is underwriting in groups run by the Tianjin and Guangdong governments, and Deutsche Bank China is doing the same in Qingdao.
Getting more non-mainland banks to join government bond underwriting is a good way to expand issuance channels, promote diversification of investors in the bills and ensure long-term sustainability while opening up the government bond market, the statement said, adding that this will advance the internationalization of the yuan and improve the local bond markets' influence worldwide.
The ministry will continue to promote the opening up of the local bond market under the guidance of the Communist Party's Central Committee and the State Council, China's cabinet, it said.
Editor: James Boynton