Local govts in the mainland issue first offshore yuan bonds in HK, Macao
Published: Oct 12, 2021 09:23 PM
rmb File photo:VCG

rmb File photo:VCG

The municipal government of Shenzhen and the provincial government of South China's Guangdong Province on Tuesday issued offshore yuan-denominated bonds in Hong Kong and Macao, the first such issuances by local governments on the mainland that will help boost the two special administrative regions' financial market and the yuan's offshore market.

The Shenzhen municipal government issued 5 billion yuan ($774.87 million) offshore bonds in Hong Kong. On the same day, the Guangdong provincial government issued 2.2 billion yuan offshore bonds in Macao. 

The offshore bond issuances are of great significance for accelerating the integration process of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), boosting the internationalization of the Chinese yuan, and support the financial markets in the two special administrative regions, experts said.

Shenzhen's issuance in Hong Kong immediately drew the attention of international investors. It was oversubscribed by 2.5 times. The Guangdong government's bonds in Macao also attracted significant attention, with over-subscription of more than three times from institutional investors from many regions, according to an official report.

The over-subscriptions from both domestic and overseas investors to the bonds are a strong reflection of the recognition and confidence of the international capital market in the development of the GBA, experts said.

The issuance of the bonds has significant meaning for cross-border financial cooperation between Chinese mainland, Hong Kong and Macao, Dong Dengxin, director of the Finance and Securities Institute of Wuhan University, told the Global Times on Tuesday.

"It was the first issuance of offshore yuan bonds by local governments in the mainland, which added new investment target for capital market in Hong Kong and the Guangdong-Hong Kong-Macao Greater Bay Area," said Dong.

Global Times