The reform of China’s local government finances is creating an opportunity out of a crisis. After years of debt-fuelled expansion, the country’s provinces and municipalities are now turning to the capital markets to consolidate their borrowings and finance future spending, presenting investors with an opportunity to diversify and underwriters with a growing revenue stream. This is a big step in the right direction, but it is no free ride. Market participants will need to tread carefully if they are to avoid the many potential pitfalls ahead....Read more