专家:上海发行地方债是把双刃剑

Experts have indicated that Shanghai was chosen as the pilot city because of the city's stronger economy and lower debt ratio. Professor Li Weisen, Vice Dean of the School of Economics at Fudan University, also believes that there are other factors that support the choice of the Shanghai municipal government as the first to get involved.

"The Shanghai government budgets are open and transparent. Meanwhile it has a much lower debt ratio than other local governments. Shanghai, as an important financial center in China, has a security market which many are familiar with. I think the choice of Shanghai will make it easier to standardize the bond-issuing process."

Yi Xianrong, a researcher with the Institute of Finance and Banking with the Chinese Academy of Social Sciences, agrees that the choice of Shanghai was the right strategy.

"Shanghai presents a better picture of local economic development. I think the risks resulting from the bonds they issue would be relatively low. So it's a good choice to select Shanghai among the first group of cities to be eligible to issue local bonds because the right choice here will smooth out the entire process before more local governments get involved."

In late October, the Ministry of Finance announced that the State Council, or Cabinet, had allowed the cities of Shanghai and Shenzhen and the provinces of Zhejiang and Guangdong to issue bonds on a trial basis this year.

Statistics provided by the nation's auditing agency shows that local government debt totaled about 10.7 trillion yuan at the end of last year. About 80 percent of local government debt is raised through local government financing vehicles, which are mainly set up to fund construction projects and have come under fierce criticism due to them being poorly supervised.

The central government is, therefore, determined to find a solution to resolve local debt problems. Giving a green light to some local governments to issue bonds independently is believed to be one way out.

Senior researcher Yi Xianrong says that the trial operation is a good thing that has three distinct benefits.

"It empowers local governments to issue their own bonds; and then facilitates evaluation on the risks of local governments' bond-issuing activities. Thirdly, local governments can adjust the styles and structures of their financing after understanding their risk evaluation."

Professor Li Weisun also admits that the trial operation represents a positive change, but he's also expressed his concern.

"The approval given to local government for their bond-issuing activities enables these governments to open their budget including the government debt to the general public. It's a good move. But since they have more financing channels, I worry that if their debt keeps rising, it would pose an insecure factor in the future of national economy."

According to the Shanghai government's bureau of finance, the government will sell 3-year fixed-rate bonds worth 3.6 billion yuan and 5-year fixed-rate bonds worth 3.5 billion yuan.

For CRI, I'm Ding Lulu.