BEIJING -- Semiconductor Manufacturing International Corporation (SMIC), China Resources (Holdings) Company and Chong Hing Bank have recently successfully issued the panda bonds, which attracted much attention in the domestic market.
Industry insiders point out that the "Belt and Road" construction and RMB internationalization will offer bigger potential for development of the panda bonds, but the supporting work, like audit, accounting and rating environment, should follow.
Compared to the bond markets in Europe and the U.S., it is still difficult for China's bond market to undertake functions of the international financial market in market maturity and depth. As a touchstone for RMB internationalization and opening-up of the bond market, the panda bond's development has further deepened the opening-up of the domestic bond market. After all, the persistent expansion of the issuing bodies and further improvement in the issuing varieties are important to build a diversified onshore bond market with good liquidity and active transactions, said relevant executive of the China Cheng Xin International Credit Rating Co., Ltd.
Meanwhile, a highly developed panda bond market will further promote progress of the RMB Internationalization and offer a broader investment and financing platform for the entities at home and abroad, help enterprises further optimize financing costs and structure, and promote growth of the real economy, the executive added.
In recent years, the "Belt and Road" construction and the acceleration in the progress of the RMB internationalization have offered great potential for development of the panda bonds. On the one hand, with the "Belt and Road" construction and the RMB internationalization, demands for RMB in the international market have increased obviously. On the other hand, given China's high saving rate and unsustainable methods of driving up economic growth by increasing fixed-asset investments, the wealth created by China is more than the demand. Therefore, the RMB will surly "go global" and support demands of the overseas projects by the "Belt and Road", according to Lai Changgeng, head of Global Markets, Greater China, BNP Paribas.
Lai believed that in the coming years, China will become the largest exporter of capital in the world and the panda bond will become one of the important financing methods.
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