Expert urges local govts to sell more municipal bonds

China should allow more local governments to sell municipal bonds to increase the transparency of their debts and defuse financial risks, said Ha Jiming, managing director of Goldman Sachs Group Inc's investment banking division.

During the last few years, many local governments have increased their use of trust products to secure financing for major projects, thereby raising concerns that local debts are hidden from view due to trust products' lack of transparency and high risk, Ha said on the sidelines of the Sanya Forum, a high-profile gathering of top-ranking business executives, think-tank leaders and policymakers.

"Local governments should replace the opaque trust products with municipal bonds, which are subject to rigorous credit rating, can attract more buyers and can help bring down borrowing costs," he said.