North China's Hebei Province has started a bid for its government bond issue worth 26.2 billion yuan (about 3.91 billion U.S. dollars) at the Shanghai Stock Exchange.

The issue involves a 4-billion-yuan 7-year bond with an interest rate of 3.5 percent, and a 22.2-billion-yuan 20-year bond with an interest rate of 3.91 percent, said a source from the bourse.

The bid has attracted 55 financial institutions, with their aggregated bidding amount reaching 386.36 billion yuan.

Hebei, with advantages in terms of location, is seeking to boost its service economy, enhance the leading role of Shijiazhuang as a provincial capital and turn Tangshan into a major city for regional cooperation in the Northeast Asia. It posted some 3.6 trillion yuan in gross domestic product last year, up 6.6 percent year on year and ranking high up in the country.

With the deal, the Shanghai Stock Exchange had altogether issued 501.8 billion yuan in local government bonds, according to Thursday's China Securities Journal.

Given the rapid expansion of local government debts, the exchange said it would work to improve relevant trade mechanism, boost the capabilities to innovate products, enhance liquidity on the secondary market and improve the values of local government bonds for investment, the newspaper said.

China plans to issue 2.15 trillion yuan of special local government bonds this year, up 800 billion yuan from a year ago, according to the government work report.

Local governments issued 782.1 billion yuan of bonds in the first two months, according to the Ministry of Finance.

China's local government debt risk remains controllable. The overall local debt ratio edged down to 76.6 percent at the end of 2018, well below the warning range of 100 percent to 120 percent.

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