China urges to promote bond market to support private enterprises

CHINA urged official organisations to promote the bond market to better support the reform and development of private enterprises on Friday (Jul 22), in order to stabilise a slowing economy.

The China Securities Regulatory Commission, National Development and Reform Commission, and All-China Federation of Industry and Commerce issued a joint statement to urge organisations including the Shanghai and Shenzhen stock exchanges to boost bond financing services and promote bond product innovation.

China's economic growth slowed sharply in the second quarter, to just 0.4 per cent year on year, weighed down by Covid-19 curbs as the highly transmissible Omicron variant spread.

The bodies were asked to push forward more qualified private companies to be included in the name list of "mature" issuers to expedite their bond sales, and encourage securities firms to increase private enterprise bond underwriting business, according to the statement.

They should also promote the so-called technology and innovation corporate bonds, while encouraging market participants to provide credit enhancement services for private issuers.

Other measures include encouraging financial institutions to invest more in private bonds, enhance disclosure quality by private issuers and improve bond default disposal mechanism. REUTERS