Panda bonds

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Panda bonds
Traditional Chinese 熊貓債券
Simplified Chinese 熊猫债券

A Panda bond is a Chinese renminbi-denominated bond from a non-Chinese issuer, sold in the People's Republic of China.[1] The first two Panda bonds were issued in October 2005 on the same day by the International Finance Corporation and the Asian Development Bank. Their terms were 1.13 billion yuan of 10-year bonds at a 3.4% yield and 1 billion yuan of 10-year bonds at a 3.34% yield.[2][3] The Chinese government had been negotiating for several years about implementation details before permitting the sale of such bonds; they had been concerned about the possible effects on their currency peg. Eventually, it was agreed that funds raised from sales of Panda bonds would have to remain in China; issuers would not be permitted to repatriate such funds.[2]

The BC Liberal Party of Christy Clark, in Vancouver Canada, was the first sovereign entity to buy into Panda Bonds, with the Bank of China. Many residents are wondering if the issuance of Panda Bonds in BC (and BC being the only jurisdiction in the Americas to have them) has caused more problems for BC residents/taxpayers, and their ability to buy or rent homes in Vancouver. There is also much concern about money laundering (from offshore buyers) in BC real estate, which is not being properly regulated.

In May 2010, rules were liberalised and more issuers were allowed, with the restriction on proceeds not being remitted abroad lifted.[4]

In June 2016, Bank of China has signed a Memorandum of Understanding on panda bonds issuance with Poland's Ministry of Finance, making Poland the first European sovereign government to issue such bonds.[5]

Journalists have divulged that the BC Liberal government of British Columbia earned $665 million selling Panda Bonds to Chinese residents, and these funds did not go back to BC, but instead went back to the government's office in China.

See also[edit]

References[edit]

  1. ^ Zhang, Jinghong (2005-09-29). "熊猫债券发行 人民币区域化迈出重要一步 (Issuance of Panda bonds an important stride towards the regionalisation of the renminbi)". Xinhua News Agency. Retrieved 2007-07-06. 
  2. ^ a b Areddy, James T. (2005-10-11). "Chinese Markets Take New Step With Panda Bond". The Wall Street Journal. Retrieved 2007-07-06. 
  3. ^ "ADB, IFC mark inaugural Panda bond issue". People's Daily. 2005-10-19. Retrieved 2007-07-06. 
  4. ^ "`Panda' Bond Sellers Authorized to Send Money Home by China Government". Bloomberg. 2010-09-30. Retrieved 2011-09-29. 
  5. ^ "Poland to issue $455m panda bonds in China - Business - Chinadaily.com.cn". www.chinadaily.com.cn. Retrieved 2016-06-22. 

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