Shanghai on Tuesday sold China’s first regional government bonds at lower-than-expected yields, a sign of investor enthusiasm for the product, The Wall Street Journal reported. The city government sold two tranches of bonds – US$567.6 million of three-year paper with a 3.1% yield and US$551.5 billion of five-year paper with a 3.30% yield – the same yields offered for central government bonds. Traders had expected the yields to be 3.25% and 3.35%, respectively. China’s central bank cut the yield on its benchmark one-year bills for the second consecutive week in open-market operations Tuesday, a signal that Beijing is slowly allowing liquidity back into the system. Shanghai was the first of four local governments approved to issue municipal bonds under the trial program: Guangdong province plans to sell US$1.09 billion of local government bonds on Friday, while Shenzhen and Zhejiang province will sell US$346 million and US$1.40 billion, respectively, later this year.