The National Development and Reform Commission, China's top economic planner, will allow bond swaps in an effort to avoid defaults in the local government-created separate investment agencies.

In a statement posted Tuesday on its website, the commission said that as part of its latest debt-restructuring effort, it will let local government financing vehicles issue new bonds to replace old ones that may have matured but can't currently be repaid due to lack of funds.

China has more than 10,000 LGFVs, created by local governments to fund the building of roads and other infrastructure.