China is likely to allow overseas institutions to issue corporate bonds on the domestic capital market when conditions are ready, a senior industry regulator said on Wednesday.

The corporate bond market is operating on a trial basis on the Chinese mainland and if it continues to proceed smoothly, the market will be expanded, according to Tu Guangshao, deputy head of the China Securities Regulatory Commission.

Only listed companies have been chosen to issue corporate bonds at present, Tu said.

Indirect financing based on the banking system now accounts for the major proportion of China's financing regime, he said.

"Operation of corporate bonds will help increase direct financing's share and improve the structure of financial products, " Tu noted.

The CSRC promulgated measures for corporate bond issuance on a trial basis on August 14.

(Xinhua News Agency September 13, 2007)