File photo shows a worker counts Chinese currency Renminbi banknotes at a bank in Tancheng County of Linyi City, East China's Shandong Province. Photo: Xinhua

China is set to issue its first yuan-denominated sovereign bonds in Canada next week, marking another step in expanding the Chinese currency’s international reach as Beijing and Ottawa deepen economic and financial cooperation amid improving bilateral relations.

China's Ministry of Finance (MOF) announced on Thursday that it plans to issue up to 4 billion yuan ($600 million) in green sovereign bonds in Canada during the week beginning November 9, with specific issuance arrangements to be announced ahead of the offering. 

The planned issuance coincides with renewed high-level economic engagement between the two countries. The Chinese Foreign Ministry announced on Friday that China and Canada will hold the second round of the China-Canada Economic and Financial Strategic Dialogue in Canada on Monday, marking a resumption of the high-level mechanism after eight years that reflects growing efforts by both countries to deepen economic cooperation and manage trade differences against a backdrop of global uncertainty.

The dialogue follows a series of steps to improve bilateral ties. In January, leaders of the two countries agreed to advance a new strategic partnership, while both sides outlined plans to strengthen cooperation in trade, investment and other economic areas. 

China began issuing yuan-denominated sovereign bonds in Hong Kong in 2009 and expanded beyond the market for the first time in 2016, selling 3 billion yuan in sovereign bonds in London, the UK. Canada is set to become another offshore issuance market after Hong Kong, London and Macao, Bloomberg reported. 

The move could help broaden the investor base for yuan-denominated assets in North America while offering institutional investors another sovereign-backed investment option, industry observers noted, adding that a wider geographical distribution of such bonds could also support the development of offshore yuan markets and encourage greater international use of the Chinese currency.

The green bond component adds another dimension to the issuance, linking financial cooperation with sustainable development. China issued 6 billion yuan in green sovereign bonds in London in April 2025, followed by another 6 billion yuan offering in Hong Kong in May 2026, which attracted subscriptions worth 10.4 times the amount issued. 

Against the backdrop of improving China-Canada relations, the planned offering reflects growing opportunities for practical financial cooperation, though its longer-term impact on the offshore yuan market will hinge on investor demand and sustained market development.

Global Times