"We are working on a mechanism to make it easier for companies to issue bonds," said Zhu Congjiu, general manager of theShanghai Stock Exchange.

According to the third national financial work conference concluded in January, theChina Securities Regulatory Commissionwill supervise corporate bond issues and theNational Development and Reform Commissionwill examine SOE bonds related tofixed assets investment.

But it is not yet clear who will have the final responsibility for developing the bond market.

"I think we should set up a consolidated supervision mechanism and I think securities regulatory organs should play a leading role in it," said Zhu.

Earlier reports said that Chinese corporate bond issues will approach 160 billion yuan in 2007 -- up a whopping 55 percent on the 2006 figure of 101.5 billion yuan.