China’s Currency is Taking a Growing Share of the World’s Bond Market

China’s stock market is notoriously volatile, but its bond market is thriving.

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China may be able to outproduce the world in everything from shoes to steel, but its financial markets remain a backwater compared with the West’s, right? That may have been true several years ago, but no longer. China’s stock market is notoriously volatile, but its bond market is thriving. Chinese companies are borrowing domestically at a healthy pace to finance their growth, while foreign companies have been tapping the new offshore market with “dim sum” bonds. The result: Renminbi-denominated corporate bond issuance totaled the equivalent of $32.85 billion in the third quarter, exceeding euro-denominated issuance ($28.4 billion) for the first time.

European leaders are courting Beijing to support a beefed-up euro zone bailout package. Perhaps before long they will be borrowing renminbi directly. — The Editors

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