China's Panda Bond Issuance Jumps 60% to 160 Billion Yuan in H1 as Global Issuers Broaden
Updated
Updated · South China Morning Post · Aug 10
China's Panda Bond Issuance Jumps 60% to 160 Billion Yuan in H1 as Global Issuers Broaden
1 articles · Updated · South China Morning Post · Aug 10
Summary
160 billion yuan of panda bonds were issued in the first half, up more than 60% from a year earlier, as foreign borrowers tapped China's domestic market in growing size.
Lower yuan funding costs drove the latest wave more than currency appreciation did, Goldman Sachs said, with clearer issuance rules and more flexibility to use proceeds offshore adding momentum.
International issuers accounted for about half of gross issuance, and the panda market's borrower mix shifted from offshore Chinese property developers toward utilities, consumer firms, foreign financial institutions and sovereigns.
358 billion yuan of dim sum bonds were also issued in H1, likewise up more than 60%, reinforcing what Goldman called a historic opening for yuan internationalisation.
Goldman said cheap funding alone will not secure the yuan's wider global use, which still needs broader market access and stronger financial links as Beijing pushes cross-border investment and financing.
Will the panda bond boom survive once the massive interest rate gap between the yuan and the US dollar eventually closes?
How might China's new blockchain-based e-CNY infrastructure transform these cheap corporate borrowings into a permanent alternative to the dollar system?