China's bond market to double

Beijing may approve almost US$10 billion in debt sales, about US$1.8 billion of which would go to the Ministry of Railways and the rest to state-owned enterprises, state media reported. In December 2005, the National Development and Reform Commission allowed 43 companies to sell about US$7.5 billion in bonds, which have accounted for 34% of the money raised through public offerings this year. The amount is only a fraction of the US$311 billion the government hopes to raise through new bank financing in 2006. Top banking officials support a more active corporate debt market because banking reforms would only be effective if there is competition between sources of funding. State-owned banks provide 90% of corporate financing.