CHINA’S economic planner has stopped reviewing new bond issue plans starting from this week, a move that may slow down the country’s corporate bond sales in the coming months, sources familiar with the situation said yesterday.

    “It’s not clear why the National Development and Reform Commission [NDRC] halted its bond project, or when it will be resumed,” said an investment banker who declined to be named.

    The suspension came after China’s anticorruption campaign spread into the top economic planner. Chinese prosecutors in August said they were investigating Zhang Dongsheng, who oversaw the country’s corporate bond issues from 2003 to 2006 in NDRC, on suspicion of bribery.

    A total of 617.5 billion yuan (US$100.6 billion) in corporate bonds regulated by the NDRC have been issued so far this year, among the 9.05 trillion yuan in new bonds in the entire market, according to information provider Wind.

    Another source, who declined to be named, said the suspension may lead to a power shift from the NDRC to other regulators. The central bank and securities regulator can also approve new corporate bond sales in China.

    China has overtaken the United States as the world’s largest issuer of corporate debt, but a slowing economy and weaker profits at its companies are causing China’s corporate debt to become riskier bets, Standard & Poor’s Ratings Services said earlier.

    Worries about the risk in China’s corporate debt have intensified in the past year, as borrowing costs spiked periodically. The government has sought to discourage lending to industries saddled with overcapacity and discipline banks that were aggressive in risky financing.

    (SD-Agencies)