Panda Bonds
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Here Are The Stories That Shaped China's Economic Climate In 2011
RMB Internationalization. This year saw numerous high-profile predictions that China’s currency, the yuan (CNY) or Renminbi (RMB), is destined to supplant the dollar as the world’s leading reserve currency. As if to realize this aim, the Chinese government embarked upon a number of steps intended to increase the use of the RMB beyond China’s borders. It expanded its currency swap arrangements with other countries, authorized more dim sum and panda bonds to be issued in RMB, and encouraged Chinese exporters and importers to settle their trade bills in yuan. One result was a dramatic expansion in holdings of offshore RMB in Hong Kong (CNH), which doubled to RMB 620 billion by October. Critics, however, counter that the yuan is still a long way from free convertibility — a prerequisite for any truly international currency — and point to a late-year fall-off in CNH deposits as evidence that willingness to hold yuan was primarily driven by short-term speculative interest, rather than longer-term faith in the RMB.
Wharf issues panda bonds
Hong Kong-based Wharf Holdings' 4 billion yuan ($599.84 million) issuance of 3-year "panda bonds" in the Chinese mainland was three times oversubscribed in a sale that signaled rising interest for onshore yuan-denominated debt. Wharf is the first Hong Kong property developer to obtain approval to issue panda bonds, or yuan-denominated bonds sold by foreigners on the mainland, with an aggregate amount not exceeding 20 billion yuan. The panda bond market kicked off in 2005, but its development lagged far behind yuan-denominated bonds sold in the offshore market, also known as dim sum bonds, until last year when Chinese issuers switched back to the onshore market to raise cheaper funds. Panda bond issuance in the first nine months this year amounted to 84.2 billion yuan, compared to 89.4 billion for dim sum bonds, statistics from Bank of China International showed.
Poland to issue $455m panda bonds in China
t is the first yuan-denominated national debt issued by the Polish government and Poland is the first European sovereign government to issue such bonds. According to China News Service, the Polish government will issue 3 billion yuan ($455.55 million) worth of panda bonds in three years in Chinese mainland, and Bank of China will be its leading underwriter. The panda bonds will push forward China-Poland bilateral cooperation in the fields of trade and financial, the Bank of China said. Panda bonds are yuan-denominated debts sold by foreign countries and overseas agencies in China. Since their first launch in 2005, more than 30 billion yuan worth of panda bonds have been issued from 2005 to 2016, according to data provider Dealogic. According to the World Bank's International Finance Corp, the panda bond market is expected to surpass 320 billion yuan in the next five years.
Knowledge Graph
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1 Sales of panda bonds in the first seven months this year totaled 55.6 billion yuan.
2 Panda bonds are yuan-denominated debts sold by foreign issuers in China.
3 Foreign investors and companies can issue SDR bonds and Panda bonds in China to fund the Belt-and-Road projects and facilitate renminbi-denominated transactions overseas.