A major Chinese bond regulator is taking fresh steps to curb debt sales by the nation's municipal borrowers, according to people familiar with the matter, adding pressure on weaker issuers looking to refinance notes.

China's local investment and development companies, also generally known as local government financing vehicles (LGFVs), are currently at a stage of reshaping their business and financing structures. With the advancement of debt defusing policies and improving financing environment, LGFVs' liquidity pressure eased, and financial transparency increased, creating space for their business transformation.

At the same time, we consider that the Urban Renewal Plan during the 15th Five-Year Plan Period set a clear direction for the transformation of LGFVs, driving them to shift from traditional investment and financing platforms to investment and operation entities focusing on urban renewal and public services. The combined force of these policies not only supports the creditworthiness of LGFVs but also provides them with a sustainable development pathway for the future.