China's local governments are tapping international debt markets for the first time as Beijing has given the green light to ten of its provinces to issue bonds to finance infrastructure projects without raising their own debt.

Last week, the Financial Times announced that Beijing Infrastructure Investment has offered a Rmb1.2 billion ($192.5 million) dim sum bond offering (bonds issued outside of China but denominated in Chinese renminbi). 

The state owned company, which is developing the China's largest subway in the capital, sold the three-year securities at 3.75% in Hong Kong in the first part of its US$2 billion mid-term note program. Another US$300 million in five-year bonds were issued at 3.625% in March. At that time, it was the first time a Chinese subway company had tapped the overseas bond market.

According to Standard & Poor's, more local government finance vehicles, including subway builders, are keen to follow Beijing Infrastructure as they face a record of US$34.1 billion of mature debt by the end of 2014.

Standard & Poor's estimates that around US$400 billion will need to be spent to meet the government's goals of completing 6,000km of subway in 38 cities by 2020.

Beijing Infrastructure Investment undertakes investment, financing, initial stage planning, operation and development of the urban rail transit system in Beijing. The subway has undergone rapid expansion since 2002, as only two of the 17 current lines were in service before then.

The most recent expansion came into effect in December 2013 with the opening of two sections on Line 8. The existing network still cannot adequately meet the city's mass transit needs and extensive expansion plans call for 19 lines and over and 1,050 km of track by 2020.