Yang Jian, researcher with the People's University of China, also welcomed corporate bonds, describing them as one of the best tools in capital allocation as they bore an interest rate higher than the national debt bonds, but were less risky than stocks.

Chinese companies welcomed the launch of corporate bonds, allowing them a new channel of financing, but they await further regulations on corporate bond issues to be able to weigh the risks against bank loans and stock financing.

"We surely welcome the issuance of corporate bonds," said Xu Junmin, secretary of board of directors of Shanghai Airlines, adding the company might issue corporate when conditions are ripe.

Corporate bonds might cut financing costs, but their issue would be decided after a comprehensive evaluation of the company's performance and financial status, said Yangjun, with Sichuan Changhong Electric Company Limited.

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A coal company in Inner Mongolia said corporate bonds could help high-yielding companies to lower financing costs, and it hoped the approval process would be no longer than three months. The approval from the NDRC usually takes a year to 18 months to complete.

Analysts believed there would be huge demand for companies to issue corporate bonds as a majority, some say 90 percent, of corporate financing still comes from bank loans.

However, questions were raised about the prospective bond buyers.

It would be difficult for both individual and institutional investors to accept corporate bonds, compared with mutual funds and stocks, said Yang Yongguang, a researcher with Sealand Fixed-income Securities Research Center.

"Individual investors would not buy the corporate bonds," echoed a business insider with China Life Insurance Assets Management Company.

However, he said insurance companies might be willing to invest in corporate bonds if there is a big interest rate gap. Insurance companies usually invest their capital in the less riskier national debts.

He also expressed concern over the nation's imperfect credit rating and tracking system, and said it could undermine the acceptance of corporate bonds.

A report from the U.S. Federal Reserve on China's corporate bonds also urged the country to develop financial institutions willing to hold corporate bonds such as insurance companies, pension funds, and investment funds.

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