SHANGHAI (REUTERS) - China's Ministry of Finance said restrictions will be removed for foreign banks to participate in the underwriting of local government bonds, part of efforts to open up the country's financial market.

The ministry said in a statement on its website that it would help its agencies nationwide to revise and improve underwriting rules for local government bond issuance.

Opening this business to foreign banks would help expand the sales channel and investor base of local government bonds, as well as promote yuan internationalisation and China's bond market, the ministry said.

Several foreign lenders, including the China subsidiaries of Deutsche Bank and Bank of East Asia, have already participated in local bond underwriting in China, the ministry said.

Beijing has allowed Chinese local governments to step up bond issuance to finance infrastructure construction to stimulate the slowing economy.

Local governments issued 4.36 trillion yuan (S$845 billion) of bonds in 2019, up from 4.17 trillion yuan the previous year.