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  • Article / 29 August 2014 at 13:41 GMT

    China's bond market reforms may backfire

    Managing Director / Asia-analytica Research
    China is about to take the leap that will finally end the 19-year ban on direct debt issuance by provincial governments. The development has been hailed as positive for reform and transparency. Yet generating hardly any discussion is the crucial question of what would happen to investor demand for local issues once they are stripped of the comfort of implicit sovereign support.
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    Juhani Huopainen Juhani Huopainen
    I don't remember ever seeing a banking/financial market liberalisation anywhere that would not have backfired. Some sort of "college cost" will eventually be paid by investors. Either...
    Pauline Loong Pauline Loong
    And do not forget national duty. Never underestimate the impact of official expectation on a corporate to do the right thing. Also, losses on a bond investment...
    Juhani Huopainen Juhani Huopainen
    Kind of reminds me of the euro area: "buy these bonds, and we will take care of you".