China to use project bonds to reduce local government debt risk

China is planning to introduce what it calls project revenue notes (PRNs) to its onshore market in order to reduce the potential risks of mounting debt at local governments and in the domestic banking system, two sources have told GlobalRMB. The People’s Bank of China (PBoC) is pushing the new funding instrument, while the National Association of Financial Market Institutional Investors (Nafmii) will supervise the programme.