Study of China’s Bond Market

Eurasia Development Group: Panda bond issuance reached CNY 150 billion in 2023, up 80% year-on-year, while the total number of issues exceeded 100, reflecting the ongoing internationalization of the renminbi.

China’s bond market is the world’s second-largest debt market and is gradually opening up to foreign issuers through instruments such as Panda bonds, Dim Sum bonds and Pearl bonds.

The study examines the historical development of the regulatory framework, key instruments and access channels for foreign participants, issuance volumes and structure, as well as major market trends and prospects.

Key Findings

• In 2023, Panda bond issuance increased to CNY 150 billion, up 80% from 2022, with 106 issues by 41 issuers.
• Foreign issuers use three main formats to raise renminbi financing: Panda bonds in the domestic market, Dim Sum bonds in Hong Kong, and Pearl bonds in free trade zones.
• Regulatory initiatives implemented in 2022–2024, including CIBM Direct, Bond Connect and simplified QFII/RQFII quotas, significantly streamlined procedures and expanded market access.
• The issuer base is becoming more diversified: the financial sector remains the largest segment at 36%, while the share of corporate and sovereign issuers in offshore jurisdictions such as the Cayman Islands and Bermuda is increasing.

Market Drivers

The internationalization of the renminbi, the interest-rate differential between China and the United States, and further development of Bond Connect and quota-based access programs are supporting growth in foreign bond issuance.

What This Means for Russian Players

• Opportunity to raise renminbi financing on more favorable terms through Panda bond issuance.
• Stronger partnerships with Chinese banks and funds, as well as broader access to liquid segments of the interbank debt market.
• Diversification of funding sources and reduced dependence on Western capital markets.

Expert Comment
“Expanding access for foreign issuers to China’s debt market creates new opportunities for Russian companies to raise renminbi financing and strengthen strategic ties,” says Fedor Susov, Managing Partner at Eurasia Capital Group.