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Northeast Asia

Two countries, two difficult bond regulators

In both China and India, winning approval to sell offshore bonds can be a torment. One regulator applies the rules punctiliously, the other seemingly without rhyme or reason. It’s a wonder issuers can sell so much.

By Morgan Davis and Matthew Thomas

Chinese bond issuers now dominate the sale of G3 bonds, with 48.7% of the $189.5 billion sold in Asia ex-Japan this year coming from the country. But while Chinese issuance has become as regular as clockwork in the offshore market, the country’s bond market regulator is more akin to a stopped clock.

The National Development and Reform Commission (NDRC), a state planning body with the power to approve offshore bond plans, has a reputation as a high hurdle to offshore debt issuance. 

Officially, the regulator stepped back from approving deals several years ago, moving to a system where only registration is required. In practice, since the regulator often decides not to acknowledge that a deal has been registered, it is simply an approval process by a different name.

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