China’s central government is to issue renminbi sovereign bonds totalling RMB6bn (USD880m) out of Hong Kong, to be sold to offshore investors.
The announcement, jointly made by China’s Ministry of Finance and the Hong Kong government is said to be aimed at lifting the international status of the renminbi. It is the first time the central government has issued renminbi-denominated treasury bonds outside of the Chinese mainland.
The Hong Kong government suggested that the move demonstrated the central government's support for Hong Kong as an international financial centre to further develop renminbi business. It added that the move illustrated the interactive, complementary and co-operative relationship between the two financial systems.
The issue of the sovereign bonds on September 28, the SAR authorities continued, is a new milestone for the development of renminbi business in Hong Kong, and also towards the global use of the renminbi itself.
As a benchmark for other renminbi bonds issued in Hong Kong, it is thought that the new issue will have a significant impact - promoting the depth and breadth of the Hong Kong bond market, and strengthening Hong Kong's position as a global financial centre.
A comprehensive report in our Intelligence Report series giving a country-by-country analysis of offshore investment funds, stock exchanges and trusts, with an analysis of the US QI regime, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report9.asp
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