Comparison of Municipal Bond Markets in the USA and China

Abstract

Municipal bonds refer to bonds issued by local governments or other qualified issuers of a country, which is a debt certificate that promises to repay principal and interest on time. The United States is the birthplace of municipal bonds, it is also the largest and most developed country in municipal bond issuance. The main objective of this thesis is to access the recent development and current trends in the municipal bond markets in China and the USA, and compare the difference between the two countries, the focus is based on types of sub-sovereign bonds issued in both countries, the amount of issuance, the main used of the issuance, maturity of sub-sovereign bonds, ratings and regulation system. According to an analysis of the municipal bond market of the United States and China, we can find out a quite difference between these two countries. By comparing Chinese local government bonds with U.S. municipal government bonds, this thesis suggests that China should establish and gradually optimize the issuance, supervision, and risk prevention system of local government bonds based on the mature operation and management experience of developed countries.