FINANCE

Chinese Province Tightens Rules on Offshore Bond Issuance by State Firms

Published: Jan. 14, 2026 6:02 p.m. GMT+8

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China’s Henan province has tightened controls on state-owned enterprises (SOEs) issuing offshore bonds, moving to close a loophole that allowed them to borrow abroad with limited oversight.

Under new rules recently released by the provincial government, local SOEs must secure shareholder approval before issuing offshore bonds, including short-dated bonds that had previously avoided review by the National Development and Reform Commission (NDRC).

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Henan province has tightened rules on SOEs issuing offshore bonds, requiring shareholder approval and risk plans.
The new measures close a loophole used for “364-day offshore bonds,” with 11 such bonds worth 5 billion yuan ($717 million) issued by local LGFVs from June to Aug. 20, 2025.
Executives involved in non-compliant borrowing now face lifetime accountability under these regulations.

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What Happened When

2024：: Regulators sought to rein in the practice of issuing '364-day offshore bonds.'

2025：: There was a rebound in the issuance of '364-day offshore bonds' by Henan-based LGFVs.

Between June 2025 and Aug. 20, 2025：: Henan-based LGFVs issued 11 '364-day offshore bonds' totaling about 5 billion yuan.

2026：: Henan provincial government released new rules tightening controls on SOE offshore bond issuance, requiring shareholder approval, feasibility studies, and risk contingency plans.

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