China Tells Local Funds to Stop Buying LGFV Bonds Via HK Link

China has effectively banned domestic investors from buying offshore yuan bonds issued by local government financing vehicles through its trading link with Hong Kong, according to people familiar with the matter, in the latest move to contain risks from the debt-laden sector.

The People’s Bank of China has asked the country’s brokerages and banks to suspend purchases of LGFVs’ so-called dim sum bonds via the Bond Connect, a program that links the mainland and Hong Kong debt markets, said the people, who asked not to be named discussing a private matter. The people didn’t offer further details or say when ...