China to be top issuer of local govt bonds

China is likely to become the world's largest local government bond issuer within five years - given the fast growth of the Chinese version of municipal bonds - as a way to facilitate debt restructuring reforms and further strengthen fiscal consolidation, an expert told China Daily.

The move would mean outstanding local government bonds, 14.74 trillion yuan ($2.3 trillion) by last week, may increase by over 50 percent to surpass the United States, currently the largest issuer, the expert said.

"In 2018, local governments are predicted to issue more new bonds than last year, with a larger proportion, or up to 50 percent, being the special bond, which may lead to a rise of the debt ceiling to more than 20 trillion yuan," said Qiao Baoyun, head of the Academy of Public Finance and Public Policy at the Central University of Finance and Economics.