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Nation to develop bond market(Xinhua)Updated: 2007-01-21 09:17 China will speed up the growth of the bond market by expanding the size of corporate bonds, Premier Wen Jiabao told the Third National Financial Work Conference. China would improve the management system of the bond to facilitate its issuance, according to the conference that closed on Saturday. Currently, corporate bond issuance must be approved by the National Development and Reform Commission (NDRC), which sets the quotas each year. The central bank sets limits on the coupons of the debt. The bond also has to obtain approval for listing from the China Securities Regulatory Commission (CSRC) and the bourse. The cumbersome approval process usually takes between one year and 18 months. Industry insiders believed China might establish a more centralized supervision system on the bond market following the conference. CSRC chairman Shang Fulin has said the development of corporate bond market is a priority for the commission in 2007. China saw the issuance of 45 corporate bonds last year, raising a record of 101.5 billion yuan (US$13 billion) for Chinese companies, up 55 percent from the previous year. The expansion in the size of corporate bonds, believed by Chinese experts, would improve the financing channels of Chinese companies. Capital raised from issuing stocks and bonds now only account for ten percent of the company financing in China, compared with fifty percent in Japanese companies and 70 percent in American companies. Dai Xu, vice general manager of the bond section with the China Galaxy Securities, said the increasing number of institutional investors in China and their fast growing investment demand would also drive up the growth of Chinese corporate bond market. (For more biz stories, please visit Industry Updates)
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