DOCSLIB.ORG

Potential Boost of RMB Internationalization in 2020S Master Thesis

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Potential Boost of RMB Internationalization in 2020S Master Thesis Potential Boost of RMB Internationalization in 2020s Master Thesis Author: Bolong Wei Supervisor A: Shi Yadong Supervisor B: Li Xing Major: China and International Relations Keystrokes: 85871 Table of Contents Abstract ............................................................................................................................................ 2 1. Introduction ................................................................................................................................. 3 1.1. The Development of RMB ............................................................................................... 3 1.2. Opportunities and Challenges of RMB Internationalization ....................................... 4 1.3. Development obstacles to the internationalization of RMB .............................................. 4 2. Literature Review ....................................................................................................................... 5 3. Methodology ................................................................................................................................ 6 3.1. Methods ............................................................................................................................. 6 3.2. Theoretical Choices ............................................................................................................ 6 3.3. Empirical Considerations (Data) ......................................................................................... 6 3.4. Delimitations of the thesis ................................................................................................. 7 4. Theory .......................................................................................................................................... 7 4.1. International Political Economy theory ......................................................................... 7 4.2. 4 Levels and 4 Structures................................................................................................. 7 4.3. Liberalism Perspective..................................................................................................... 8 4.4. Mercantilism Perspective ................................................................................................ 9 4.5. Structuralism Perspective and the World System Theory .......................................... 12 5. Analysis ...................................................................................................................................... 13 5.1. 10 year development of RMB Internationalization in a nut shell .............................. 13 5.2. Policies Transformations——From Pilot Program for Trade Settlement to Current Account Settlement, then to Capital Account Settlement .................................................. 14 5.3. International Use of the RMB ....................................................................................... 15 5.4. Infrastructure Construction .......................................................................................... 19 5.5. China’s Belt and Road Initiative and Asian Infrastructure Investment Bank ......... 21 5.6. RMB’s Inclusion into SDR ............................................................................................ 25 5.7. RMB-denominated Commodities: Shanghai International Energy Exchange Co., Ltd. (INE) crude oil as an example ...................................................................................... 26 5.8. Offshore RMB Market .................................................................................................. 27 5.9 Digitalization of the RMB ............................................................................................... 30 6. Conclusion ................................................................................................................................. 32 6.1 Increase China's Influence in the World ....................................................................... 33 6.2 Stabilize the World Economy ......................................................................................... 33 6.3 Seize the Development Opportunities ........................................................................... 33 Bibliography: ................................................................................................................................. 35 1 Abstract The thesis aims to answer the question that why does the Chinese government need to speed up the process of RMB Internationalization, especially in the new global context of 2020s. The thesis based on empirical data collected from official reports, database of international organizations and scholar’s articles, will use qualitative and deductive methods to exemplified the problem formulation. International Political Economy will be used in this thesis as a framework, because it have a more comprehensive theoretical framework to deconstruct a more complicated situation or phenomenon, which is RMB Internationalization in the text. The thesis at first the thesis will briefly review the history of RMB Internationalization, including the overall development and the policy transformation. Then several aspects of the processes will be introduced and analyzed separately in the following orders: international use, infrastructure construction (especially for payment or clearance), China’s Belt and Road initiative and Asian Infrastructure Investment Bank, RMB’s Inclusion into SDR, RMB-denominated Commodities (INE crude oil), offshore RMB market and Digitalization of the RMB. In these chapters, different parts apply different theories. At last, the author will give conclusions on the verification of the formulated problem, and also try to share more thoughts based on some new international context (especially the coronavirus pandemic) on it. 2 Potential Boost of RMB Internationalization in 2020s 1. Introduction 1.1. The Development of RMB The People’s Bank of China (PBC) was formally established in the late 1948, and the Renminbi (abbreviated RMB) was born at the same time. PBC began to exchange various currencies issued by the liberated areas, while prohibiting the circulation of currency issued by other parties, such as gold bonds (“Jinyuan Quan”) and silver bonds (“Yinyuan Quan”). After the end of Chinese Civil War, currency of China was gradually unified (Zhong & Wei, 2018). Thus，the first set of RMB was born in the liberation fire, opening a new chapter in China's financial history. The end of the chaotic history of the flow of money markets in old China laid a solid foundation for the victory of the liberation war in the country. In 1949, Tianjin, Shanghai, Xiamen, Guangzhou and other ports have been liberated. Under the unified leadership of the central government, the Chinese the People's Bank of China, based on the exchange rate of the Tianjin port, shall, according to local conditions, formulate and publish the foreign exchange licence price on its own. On January 18, 1949, Tianjin first reported that the exchange rate of RMB to the US dollar was equivalent to RMB 80 (old currency). After February 1973, the United States dollar imposed its second statutory devaluation since the Second World War, and subsequently other major Western countries announced that they would no longer assume the obligation to maintain a fixed exchange rate under the Bretton Woods system, and the international monetary system entered an era of general fluctuations. Under the floating exchange rate system, the international financial situation is volatile. In order to avoid the damage that western countries may cause China's economy by using the devaluation of currency to pass on the economic crisis, export inflation and unfair competition in the international market, the formulation and adjustment of RMB exchange rate has changed from the original US dollar as the benchmark currency to the peg to a basket of currencies, i.e. to select a number of important currencies related to China's foreign trade, and calculate the exchange rate of RMB against a certain currency according to the changes in the weighted average exchange rate of these currencies.(PBC, 2015) In 2009, the RMB ushered in a good period of opportunity for cross-border trade settlement and peripheral development. After that, the internationalization of RMB has officially entered the track, the specific situation will be analyzed later. 3 Central bank digital currency (CBDC, also called digital fiat currency or digital base money) is the digital form of fiat money (a currency established as money by government regulation or law). China has been working on its own CBDC, DCEP, for years, and it turns out to have some breakthroughs in recent years. According to April 16 news, the central bank's digital currency of China will first land in Suzhou Xiangcheng to test the first application scenario. (Xinhuanet, 2020) This also may cause great impacts on multi-dimensional economic ties, including bi-multilateral trades, in/direct investment, cross-border circulation and so on. 1.2. Opportunities and Challenges of RMB Internationalization While the RMB is increasingly used for cross-border payments, it is limited to border trade with neighboring countries and between foreign companies in China and their parent companies. Current international situation provides probably a golden chance for RMB Internationalization. China has undertaken some important methods to promote RMB Internationalization including
Load more

Recommended publications
  • Competition in China's Securities Market: Reform of Current Regulatory System Chenxia Shi Monash University
    Loyola University Chicago International Law Review Volume 3 Article 7 Issue 2 Spring/Summer 2006 2006 Competition in China's Securities Market: Reform of Current Regulatory System Chenxia Shi Monash University Follow this and additional works at: http://lawecommons.luc.edu/lucilr Part of the International Law Commons Recommended Citation Chenxia Shi Competition in China's Securities Market: Reform of Current Regulatory System, 3 Loy. U. Chi. Int'l L. Rev. 213 (2006). Available at: http://lawecommons.luc.edu/lucilr/vol3/iss2/7 This Feature Article is brought to you for free and open access by LAW eCommons. It has been accepted for inclusion in Loyola University Chicago International Law Review by an authorized administrator of LAW eCommons. For more information, please contact [email protected]. COMPETITION IN CHINA'S SECURITIES MARKET: REFORM OF CURRENT REGULATORY SYSTEM Chenxia Shit I. Introduction The recently amended Securities Law in China took effect on January 1, 2006.1 While the amended law could be stronger, it goes a long way in making amendments to more than 100 articles concerning "expansion of the scope of the securities under regulation, separate regulation for different financial sectors among the banking, insurance, and securities industries, public offering, forward trading, money and stock lending/financing, permitting State-owned enterprises ' 2 and banking funds to enter the stock market, and better protection of investors. The amended law provides a platform for liberalizing and developing China's securities market, however implementation of most of these reforms is left to the direction of the State Council to enact specific regulations.
    [Show full text]
  • Currency Codes COP Colombian Peso KWD Kuwaiti Dinar RON Romanian Leu
    Global Wire is an available payment method for the currencies listed below. This list is subject to change at any time. Currency Codes COP Colombian Peso KWD Kuwaiti Dinar RON Romanian Leu ALL Albanian Lek KMF Comoros Franc KGS Kyrgyzstan Som RUB Russian Ruble DZD Algerian Dinar CDF Congolese Franc LAK Laos Kip RWF Rwandan Franc AMD Armenian Dram CRC Costa Rican Colon LSL Lesotho Malati WST Samoan Tala AOA Angola Kwanza HRK Croatian Kuna LBP Lebanese Pound STD Sao Tomean Dobra AUD Australian Dollar CZK Czech Koruna LT L Lithuanian Litas SAR Saudi Riyal AWG Arubian Florin DKK Danish Krone MKD Macedonia Denar RSD Serbian Dinar AZN Azerbaijan Manat DJF Djibouti Franc MOP Macau Pataca SCR Seychelles Rupee BSD Bahamian Dollar DOP Dominican Peso MGA Madagascar Ariary SLL Sierra Leonean Leone BHD Bahraini Dinar XCD Eastern Caribbean Dollar MWK Malawi Kwacha SGD Singapore Dollar BDT Bangladesh Taka EGP Egyptian Pound MVR Maldives Rufi yaa SBD Solomon Islands Dollar BBD Barbados Dollar EUR EMU Euro MRO Mauritanian Olguiya ZAR South African Rand BYR Belarus Ruble ERN Eritrea Nakfa MUR Mauritius Rupee SRD Suriname Dollar BZD Belize Dollar ETB Ethiopia Birr MXN Mexican Peso SEK Swedish Krona BMD Bermudian Dollar FJD Fiji Dollar MDL Maldavian Lieu SZL Swaziland Lilangeni BTN Bhutan Ngultram GMD Gambian Dalasi MNT Mongolian Tugrik CHF Swiss Franc BOB Bolivian Boliviano GEL Georgian Lari MAD Moroccan Dirham LKR Sri Lankan Rupee BAM Bosnia & Herzagovina GHS Ghanian Cedi MZN Mozambique Metical TWD Taiwan New Dollar BWP Botswana Pula GTQ Guatemalan Quetzal
    [Show full text]
  • Download File
    The Ministry of culture and sports of the Republic of Kazakhstan State of conservation report the Republic of Kazakhstan "Silk Roads: the Routes Network of Chang’an-Tianshan Corridor (Kazakhstan, China, Kyrgyzstan): theTalgar, Koilyk, Karamergen, Aktobe, Kulan, Kostobe, Ornek sites and the Akyrtas archaeological complex (Kazakhstan territory) Astana, 2017 State of conservation report the Republic of Kazakhstan "Silk Roads: the Routes Network of Chang’an-Tianshan Corridor (Kazakhstan, China, Kyrgyzstan): the Talgar, Koilyk, Karamergen, Aktobe, Kulan, Kostobe, Ornek sites and the Akyrtas archaeological complex (Kazakhstan territory) 2017 2 TABLE OF CONTENTS No. Name page INTRODUCTION 4 I OVERALL STRATEGY OF PRESERVATION OF THE WORLD 6 CULTURAL HERITAGE PROPERTY IN THE REPUBLIC OF KAZAKHSTAN I.1 LEGISLATIVE AND ADMINISTRATIVE MEASURES 7 I.2 FINANCIAL MEASURES, RESEARCH AND TECHNICAL 7 STUDIES I.3 SPECIALIST TRAINING ACTIVITIES 8 II STATE OF CONSERVATION OF THE COMPONENTS IN 9 KAZAKHSTAN OF THE WORLD HERITAGE SITE "SILK ROADS: THE ROUTES NETWORK OF CHANG'AN-TIANSHAN CORRIDOR" II. 1 THE TALGAR SITE (S 01-KZ) 9 ANNEX I 13 PROTOKOL Ref. No. 21-5/05-1557 dated: 27.10.2016 of the visiting meeting on issue of the medieval ancient settlement "Talgar" Chairman: Deputy Prime Minister of the Republic of Kazakhstan I.N. Tasmagambetov (Russian and English) ANNEX II 1. Letter of deputy prime minister of the republic of Kazakhstan No. 15 20-55/1668 dd. September 1, 2016. (Russian and English) 2. Telephone message Ref. No. 11/И-13 dated: 24.10.2016 (Russian 17 and English) 3. Letter No.3968 dd. October 21, 2016 of Head of the Internal Policy 19 Department A.
    [Show full text]
  • Doing Business in Kazakhstan
    DOING BUSINESS 2021 IN KAZAKHSTAN Doing Business in Kazakhstan 2021 Baker McKenzie – CIS, Limited Almaty office Samal Towers, 8th Floor 97 Zholdasbekov Street Almaty, Kazakhstan 050051 Phone: +7 727 3 300 500 Facsimile: +7 727 258 40 00 [email protected] www.bakermckenzie.com The information in this brochure is for informational purposes only and it may not reflect the most current legal developments, judgments or settlements. This information is not offered as legal or any other advice on any particular matter. The Firm and the contributing authors expressly disclaim all liability to any person in respect of anything and in respect of the consequences of anything done or omitted wholly or partly in reliance upon the whole or any part of the contents of Baker McKenzie’s “Doing Business in Kazakhstan” brochure. No client or other reader should act or refrain from acting on the basis of any matter contained in this brochure without seeking the appropriate legal or other professional advice on the particular facts and circumstances. Doing Business in Kazakhstan Table of Contents 1 Kazakhstan — an overview ..................................................... 1 1.1 Geography .................................................................... 1 1.2 Population .................................................................... 1 1.3 History.......................................................................... 1 1.4 Government and political system ................................. 2 1.5 Economy .....................................................................
    [Show full text]
  • Bank of China Debt Capital Markets Capabilities Market Outlook 2020
    PRIVATE & CONFIDENTIAL Bank of China Debt Capital Markets Capabilities Market Outlook 2020 Bank of China Limited January 2020 0 Content BOC Capabilities 2 Market Developments and Outlook 9 Case Studies 20 DCM Team 54 Green Bond Developments 56 1 Experience and Capabilities - Top Asian Debt Capital Market Franchise EM Bonds 2019 League Table (bln USD) Bookrunner Rank Vol Issues Global coverage with DCM Centre established across key financial centers – Beijing, Hong Kong, Singapore and London. Bank of China 1 89.4 646 Citics 2 69.2 575 Global footprint with diversified investor base and solid relationship with major global investors who could provide supportive anchor orders, especially in Asia. ICBC 3 66.1 482 China Securities 4 64.7 577 Global Global Strong support from in-house investment book with a potential credit line for corporate names. Citi 5 62.2 451 Coverage HSBC 6 61.7 581 Strategy partner in RMB transactions. Guotai Junan 7 54.5 525 Asian top underwriter for G3 issuance, and the only leading underwriter in both China Onshore and Offshore market. JP Morgan 8 51.6 346 CICC 9 48.3 350 Standard Chartered 10 43.5 440 2019 2019 2019 2019 2018 2018 2018 2017 Logicor Financing CPI Property SA PPF Arena 1 CEZ Group EP Infrastructure Agricultural Development EUR Ministry of Finance of the EUR 500 million due 2022 Bank of China Luxembourg People’s Republic of China EUR 1,850 million EUR 550 million EUR 550 million Senior Unsecured Bond EUR750 million Transactions Senior Unsecured Bond Subordinated Bond Senior Unsecured Bond Co-Manager
    [Show full text]
  • Economic Newsletter on Kazakhstan |June 2020
    Economic Newsletter on Kazakhstan |June 2020 CONTENTS MACRO-ECONOMICS & FINANCE ......................................................................................2 ENERGY & NATURAL RESOURCES ......................................................................................5 TRANSPORT & COMMUNICATIONS...................................................................................9 AGRICULTURE ................................................................................................................. 10 CONTACTS ...................................................................................................................... 13 The Economic Section of the Embassy of the Kingdom of the Netherlands in Kazakhstan intends to distribute this newsletter as widely as possible among Dutch institutions, companies and persons from the Netherlands. The newsletter summarises economic news from various Kazakhstani and foreign publications and aims to provide accurate information. However, the Embassy cannot be held responsible for any mistakes or omissions in the bulletin. ECONOMIC NEWSLETTER, June 2020 Embassy of the Kingdom of the Netherlands MACRO-ECONOMICS & FINANCE Kazakhstan’s national budget receives almost 25% less taxes The state budget of Kazakhstan began to receive less income, including tax revenues. Over 5 months of 2020, the state budget income of Kazakhstan amounted to more than 3.4 trillion tenge, which is 10% less than in 5 months of 2019. This is evidenced by the data of the State Revenue Committee. Tax revenues
    [Show full text]
  • Eswar S. Prasad February 4, 2016
    CHINA’S EFFORTS TO EXPAND THE INTERNATIONAL USE OF THE RENMINBI Eswar S. Prasad February 4, 2016 Report prepared for the U.S.-China Economic and Security Review Commission CHINA’S EFFORTS TO EXPAND THE INTERNATIONAL USE OF THE RENMINBI Eswar Prasad1 February 4, 2016 Disclaimer: This research report was prepared at the request of the U.S.-China Economic and Security Review Commission to support its deliberations. Posting of the report to the Commission's website is intended to promote greater public understanding of the issues addressed by the Commission in its ongoing assessment of U.S.-China economic relations and their implications for U.S. security, as mandated by Public Law 106-398 and Public Law 108-7. However, it does not necessarily imply an endorsement by the Commission or any individual Commissioner of the views or conclusions expressed in this commissioned research report. Disclaimer: The Brookings Institution is a private non-profit organization. Its mission is to conduct high- quality, independent research and, based on that research, to provide innovative, practical recommendations for policymakers and the public. The conclusions and recommendations of any Brookings publication are solely those of its author(s), and do not reflect the views of the Institution, its management, or its other scholars. 1 Cornell University, Brookings Institution, and NBER. The author is grateful to members and staff of the Commission for their thoughtful and constructive comments on an earlier draft of this report. Audrey Breitwieser, Karim Foda, and Tao Wang provided excellent research assistance. William Barnett and Christina Golubski provided editorial assistance.
    [Show full text]
  • "Panda Bonds: Measures and Guidelines for Foreign Investors" Legal Update
    Panda Bonds: Measures and Guidelines for foreign investors In the first half of 2018 the issuance of the so-called Panda Bonds amounted to RMB 51.49 billion, more than 70% of the total issuance in 2017 and, by the end of 2018, a total of 57 overseas institutions (mainly non-financial enterprises) have been registered or approved for bond issuance in the Chinese Interbank Bond Market (“CIBM”) with an approved issued amount of RMB 453.3 billion. As a preliminary remark, the term Panda Bond refers to bond denominated in renminbi, which a non- Chinese organization issues in China Mainland (Hong Kong, Macau and Taiwan excluded) with the aim to raise capital from investors located in the People’s Republic of China (“PRC”). The vigorous opening up of the Chinese bond market and the increasing number of overseas institutions allowed to issue Panda Bond has led Chinese government to promulgate new more sophisticated rules which officially abolish the old PRC legal framework of 2010 and have greater alignment with international practices. On September 8, 2018, the People's Bank of China ("PBOC") and the Ministry of Finance (“MOF”) jointly issued the Interim Measures of the Administration of Offshore Institutions' Bond Offering in National Interbank Bond Market (“Measures”). In addition, the National Association of Financial Market Institutional Investors (“NAFMII”) issued the Guidelines for Debt Financing Instrument Business of Overseas Non-financial Enterprises (for Trial Implementation) ("Guidelines"), immediately effective from the date of issuance, January 17, 2019. The Guidelines, to be read together with the Measures, set out major requirements and clarifications for overseas investors regarding the following three main aspects as: information disclosure, use of funds raised and requirements for intermediary agencies.
    [Show full text]
  • Currency List
    Americas & Caribbean | Tradeable Currency Breakdown Currency Currency Name New currency/ Buy Spot Sell Spot Deliverable Non-Deliverable Special requirements/ Symbol Capability Forward Forward Restrictions ANG Netherland Antillean Guilder ARS Argentine Peso BBD Barbados Dollar BMD Bermudian Dollar BOB Bolivian Boliviano BRL Brazilian Real BSD Bahamian Dollar CAD Canadian Dollar CLP Chilean Peso CRC Costa Rica Colon DOP Dominican Peso GTQ Guatemalan Quetzal GYD Guyana Dollar HNL Honduran Lempira J MD J amaican Dollar KYD Cayman Islands MXN Mexican Peso NIO Nicaraguan Cordoba PEN Peruvian New Sol PYG Paraguay Guarani SRD Surinamese Dollar TTD Trinidad/Tobago Dollar USD US Dollar UYU Uruguay Peso XCD East Caribbean Dollar 130 Old Street, EC1V 9BD, London | t. +44 (0) 203 475 5301 | [email protected] sugarcanecapital.com Europe | Tradeable Currency Breakdown Currency Currency Name New currency/ Buy Spot Sell Spot Deliverable Non-Deliverable Special requirements/ Symbol Capability Forward Forward Restrictions ALL Albanian Lek BGN Bulgarian Lev CHF Swiss Franc CZK Czech Koruna DKK Danish Krone EUR Euro GBP Sterling Pound HRK Croatian Kuna HUF Hungarian Forint MDL Moldovan Leu NOK Norwegian Krone PLN Polish Zloty RON Romanian Leu RSD Serbian Dinar SEK Swedish Krona TRY Turkish Lira UAH Ukrainian Hryvnia 130 Old Street, EC1V 9BD, London | t. +44 (0) 203 475 5301 | [email protected] sugarcanecapital.com Middle East | Tradeable Currency Breakdown Currency Currency Name New currency/ Buy Spot Sell Spot Deliverabl Non-Deliverabl Special Symbol Capability e Forward e Forward requirements/ Restrictions AED Utd. Arab Emir. Dirham BHD Bahraini Dinar ILS Israeli New Shekel J OD J ordanian Dinar KWD Kuwaiti Dinar OMR Omani Rial QAR Qatar Rial SAR Saudi Riyal 130 Old Street, EC1V 9BD, London | t.
    [Show full text]
  • Green Panda Bond Handbook
    Handbook How to issue a green panda bond Investment in low-carbon solutions will Existing rules provide clear guidance to Chinese policymakers are keen on be essential for meeting global emission ensure market robustness facilitating investment in green assets reduction targets under the Paris Agreement Regulators in China have published guidelines As China accelerates the transitions toward on climate change. Given the projected on green bonds issuance procedures, criteria to a green and sustainable growth model, green climate volatility over the coming decades, define green assets and projects, requirements investment is expected to play a pivotal role. infrastructure, with its long life time, should on external review and verification, and In August 2016, China’s seven ministerial be designed as climate resilient. guidance on post-issuance disclosure. agencies jointly released the Guidelines for The rapid growth of the global green bond These guidelines provide clear guidance and Establishing the Green Financial System,3 making market has shown that capital markets for issuers on how to issue green bonds in China the first country to establish a policy provide a promising channel to finance China’s bond market, with a view to enhance framework for green financial system. climate investments. potential issuers’ capacity and market integrity. The Guidelines call for the securities market The booming Chinese green bond market For more details on green bond guidelines to promote green investment for institutional offers great opportunities and regulations, see Table 3 on page 4. investors (pension funds and insurance companies) to invest in green financial With total issuance of USD60.9bn as of Domestic investors have been supporting products; and investors to release green October 2018, China is now the world’s the growth of China’s green bond market investment responsibility reports.
    [Show full text]
  • DEBT MARKETS a Brief Introduction to China's Bond Market
    DEBT MARKETS JOINT RESEARCH RUSSIA AND CHINA February 28, 2019 A brief introduction to China’s bond market A brief introduction to the history Structure, regulation, and opening-up of China’s bond market ……………………..……….…2 — China’s bond market is ranked third globally in terms of size, How China’s bond market is occupying about 95% of GDP. With rapid economic growth, stable organized …………………………….3 financial conditions, and government support in its developing capital The structure of issuers and market, China’s bond market is growing quickly in terms of both investors in China’s bond issuance and trading volume, with increasingly diversified bond market.………..…………………….…5 varieties, issuers, and investors. Bond issuance is now the main channel How China’s bond market is regulated .…………………………….8 of direct financing for corporates in China. What’s going on in the primary — Market fragmentation is one of the features of China’s bond market?……...………………………..10 market. China’s bond market is dominated by the interbank bond What’s going on in the secondary market (OTC market) and supplemented by the exchange bond market. market?..….....................................13 Due to lack of connectivity, sub-markets are discrete, with different Assessing credit risk in China trading systems, market participants, and bond varieties. Accordingly, through credit ratings …..……….17 the regulatory framework is also fragmented. This is reflected in Assessing credit risk in China multiple systems of regulation with different regulatory concepts, through credit bond spread ……18 operation mechanisms, and regulatory styles on different trading floors Assessing credit risk in China by different regulators. through analysis on defaults …..19 The opening-up of China’s bond — Governmental institutions are the main issuers and commercial market ….......................................22 banks are the main holders.
    [Show full text]
  • New Regulations for Panda Bonds in China's Interbank Market
    October 11, 2018 Banking & Finance Law New Regulations for Panda Bonds in China's Interbank Market Financial and Investment Management Department In recent years, with the development of China's economy and the internationalization of the renminbi, more and more overseas financial institutions and non-financial institutions have issued renminbi-denominated bonds in China1 ("Panda Bonds"). The number and size of the Panda Bonds issued in 2018 have increased significantly. For the half year ended 30 June 2018, 23 Panda Bond issuances were offered in the China Interbank Bond Market ("CIBM") with a total amount of RMB 41.26 billion, accounting for 80.13% of total Panda Bond issuances by value2. Eight Panda Bonds were issued in the Exchange Bond Market with a total amount of RMB 10.23 billion, accounting for 19.87% of the total Panda Bond issuances by value3. Despite the relatively large size of Panda Bond issuances in China's markets, the relevant regulators had not issued specialized regulations for Panda Bonds, except for regulations on issuances of Panda Bonds by international development institutions. In practice, other overseas institutions that have issued Panda Bonds in the CIBM, such as foreign government agencies, overseas financial institutions and non-financial enterprises, have had to refer to relevant regulations and rules for domestic institutional bond issuances, which has led to some uncertainty. On 25 September 2018, the People's Bank of China ("PBOC") and the Ministry of Finance ("MOF") officially issued the Interim Measures for Administration of the Issuance of Bonds by 1 "China" and "Domestic" (for the purposes of this article only) refer to the territory of the People’s Republic of China, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan; “overseas” (for the purposes of this article only) refers to countries and regions outside of China.
    [Show full text]