China’s Urban Construction Investment Bond: Contextualising a Financial Tool for Local Government

Zhen Ye; Fangzhu Zhang; D' Maris Coffman; Senmao Xia; Zhifeng Wang; Zhonghua Zhu

doi:10.1016/j.landusepol.2020.105153

China’s Urban Construction Investment Bond: Contextualising a Financial Tool for Local Government

Zhen Ye, Fangzhu Zhang, D' Maris Coffman, Senmao Xia, Zhifeng Wang, Zhonghua Zhu

FBL International Centre for Transformational Entrepreneurship (ICTE)

Research output: Contribution to journal › Article › peer-review

5 Citations (Scopus)

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Abstract

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.

Original language	English
Article number	105153
Journal	Land Use Policy
Volume	112
Early online date	13 Nov 2020
DOIs	https://doi.org/10.1016/j.landusepol.2020.105153
Publication status	Published - Jan 2022

Bibliographical note

NOTICE: this is the author’s version of a work that was accepted for publication in Land Use Policy. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Land Use Policy, 112 (2020)

DOI: 10.1016/j.landusepol.2020.105153
© 2020, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International
http://creativecommons.org/licenses/by-nc-nd/4.0/

Keywords

China
Financialisation
Infrastructure finance
Relative risks
Urban construction investment bond

ASJC Scopus subject areas

Forestry
Geography, Planning and Development
Nature and Landscape Conservation
Management, Monitoring, Policy and Law

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.landusepol.2020.105153

Post-PrintAccepted author manuscript, 933 KBLicence: CC BY-NC-ND

https://www.sciencedirect.com/science/article/abs/pii/S0264837719324810

Cite this

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title = "China{\textquoteright}s Urban Construction Investment Bond: Contextualising a Financial Tool for Local Government",

abstract = "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.",

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AU - Zhu, Zhonghua

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N2 - 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.

AB - 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.

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China’s Urban Construction Investment Bond: Contextualising a Financial Tool for Local Government

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

UN SDGs

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