Haikou, Wednesday Sep 13th – Hainan Province is set to make a significant financial move by issuing offshore RMB bonds amounting to 5 billion yuan ($686 million) in Hong Kong. The initiative, spearheaded by the provincial finance bureau, aims to diversify investment opportunities and bolster international investment in the region.
Varied Bond Types to Attract Investors
These bonds will be listed on the Hong Kong Stock Exchange and will span two, three, and five-year terms, offering international investors a range of choices for RMB asset allocation.
Notably, the two-year bonds will be classified as sustainable development bonds, while the three-year bonds are biodiversity-themed green bonds, marking a pioneering effort by a local government in China. The five-year bonds, known as blue bonds, will primarily fund maritime economy and marine protection projects.
This follows a similar issuance by the Hainan government in October, which included the debut of blue bonds and sustainable development bonds in Hong Kong.
Driving Reforms and Sustainable Development
Hainan’s move to issue offshore RMB bonds signifies a commitment to advancing reform, fostering an open financial environment, and promoting financial innovation. Proceeds from these bonds will be channelled primarily into critical sectors such as healthcare, education, environmental monitoring and restoration, biodiversity protection, and marine conservation. The overarching goal is to expedite the sustainable development strategy, propel the creation of a national ecological civilization pilot zone, and further marine ecological preservation and restoration.
Wang Youxin, a senior researcher at the Bank of China Research Institute, has emphasized that this initiative will diversify investment avenues and attract more overseas investors to explore RMB assets. Wang also highlighted the potential for these bonds to bolster the construction of the Hainan Free Trade Port and enhance the province’s international visibility and appeal, creating opportunities for international capital and cooperation.
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