China’s urban construction investment bond: Contextualising a financial tool for local government

• Ye, Zhen ^[1] ; Zhang, Fangzhu ^[3] ; Coffman, D’Maris ^[4] ; Xia, Senmao ^[2] ; Wang, Zhifeng ^[5] ; Zhu, Zhonghua ^[5]
  1. [1] University College London

     University College London

     Reino Unido

     
  2. [2] Coventry University

     Coventry University

     Reino Unido

     
  3. [3] Bartlett School of Planning, UCL, UK
  4. [4] Bartlett School of Construction & Project Management, UCL, UK
  5. [5] School of Management Science & Engineering, Central University of Finance & Economics, UK

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• Localización: Land use policy: The International Journal Covering All Aspects of Land Use, ISSN 0264-8377, ISSN-e 1873-5754, Nº. 112, 2022
• Idioma: inglés
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• Resumen

  • This paper examines the Urban Construction Investment Bond (UCIB) as a tradable product in the financial market and a financial tool for local government in China. The development of this financial product is contextualised in infrastructure finance and local government debt. The creation of UCIB helps finance infrastructure investment and potentially reveal the relative risks through the secondary market. The spatial distribution of UCIB demonstrates different relative risks of this financial instrument in local conditions. The government uses this financial tool to bridge the emerging capital market and infrastructure finance, and the Chinese financial market now treats UCIB as an emerging asset class. The development of UCIB has sped up the pace of financialisation in China. Although relative risks help investors choose different UCIBs, the overall risk of UCIB cannot be ignored.