With the further opening-up of China’s financial market and the continuous progress of the internationalization of Renminbi in recent years, more and more foreign entities choose to issue renminbi-dominated bonds in mainland China (for the purpose of this article, excluding Hong Kong, Taiwan and Macao). In accordance with international practice, renminbi-denominated bonds issued in China by foreign organizations was named as “Panda Bonds”.
China’s onshore bond markets comprises the interbank bond market and exchange bond market. Interbank bond market is regulated by People’s Bank of China (“PBOC”) and exchange bond market is regulated by China Securities Regulatory Commission (“CSRC”). While there are no specific rules for issuing Panda Bonds in exchange bond markets, new rule has been issued by PBOC regulating the issuance of Panda Bonds in interbank bond market by foreign organizations including governmental agencies, international development institutions, foreign financial institutions and non-financial enterprises.