CHINA has ordered greater scrutiny of bond sales by local government finance vehicles with higher levels of debt, three people with knowledge of the matter have said.

The National Development and Reform Commission, which approves bond sales by companies that local governments set up to finance projects, will more strictly review applications for debt with credit ratings below AA+ sold by issuers with debt-to-asset ratios exceeding 65 percent, according to the sources.

The NDRC, the country's top economic planning agency, will also tighten approval for other companies seeking to sell bonds with credit ratings below AA+ if the issuers have debt-to-asset ratios exceeding 75 percent, the people said.

The NDRC shares oversight of China's debt markets with the People's Bank of China and the China Securities Regulatory Commission. The NDRC is responsible for approving bond sales by companies that aren't publicly traded. About 63 percent of such bonds sold in China last year had credit ratings below AA+, according to a report by the National Association Financial Market Institutional Investors.