SHANGHAI: China's Jiangsu provincial government auctioned a total of 17.4 billion yuan ($2.81 billion) of five-, seven- and 10-year bonds at yields of 4.06, 4.21 and 4.29 percent, respectively, traders said on Thursday.

Jiangsu province is the third province that has issued bonds directly this year, without the finance ministry acting as a proxy. Guangdong and Shandong provinces issued bonds earlier this year.

China announced in May that it would allow local governments to issue US-style municipal bonds for the first time in an experiment to straighten out its messy state budget, and start the clean-up of its massive local government debt problem.

The Ministry of Finance announced shortly afterwards that it had granted 10 local governments a combined quota of 109.2 billion yuan to issue such bonds this year.