Drive to urbanize requires change in financing

China's urbanization drive will speed up the reform of the fiscal and public project funding, as the current financial mechanism for local governments can't meet the huge funding need, according to a newly issued urbanization plan and officials.

The unprecedented National New-Type Urbanization Plan (2014-20) outlines a "diversified" and "sustained" funding system for urbanization. And, for the first time, the State Council has agreed to let local governments issue municipal bonds.

At a Wednesday news conference, Liu Kun, vice-minister of finance, said the government will boost the bond market by allowing local governments to issue bonds at their own discretion.