Dim sum bonds are bonds issued outside of China but denominated in Chinese renminbi, rather than the local currency. They are named after

dim sum Dim sum () is a large range of small Chinese dishes that are traditionally enjoyed in restaurants for brunch. Most modern dim sum dishes are commonly associated with Cantonese cuisine, although dim sum dishes also exist in other Chinese cu ...

, a popular style of cuisine in southern China. They are a type of eurobond. Unlike

panda bonds A Panda bond is a Chinese renminbi-denominated bond from a non-Chinese issuer, sold in the People's Republic of China. The first two Panda bonds were issued in October 2005 on the same day by the International Finance Corporation and the Asian D ...

, dim sum bonds are issued in the offshore market for offshore RMB.

History and use

The first dim sum bond was issued by the

China Development Bank China Development Bank (CDB) is a policy bank of China under the State Council. Established in 1994, it has been described as the engine that powers the national government's economic development policies.

in July 2007. Until July 2010, only Chinese and Hong Kong banks could issue renminbi-denominated bonds;

deregulation Deregulation is the process of removing or reducing state regulations, typically in the economic sphere. It is the repeal of governmental regulation of the economy. It became common in advanced industrial economies in the 1970s and 1980s, as a ...

led to the development of an offshore market in renminbi and the internationalization of dim sum bonds. The bonds became more popular as foreign companies sought yuan-denominated assets as the renminbi appreciated in 2011. Although the major market for dim sum bonds is Hong Kong,

China Construction Bank The China Construction Bank Corporation (CCB) is a Chinese partially state-owned Multinational corporation, multinational banking and financial services corporation headquartered in Beijing, Beijing, China. It is one of the "Big four banks, big ...

became the first Chinese Bank to issue a renminbi denominated bond in London in November, 2012. This followed similar issues by non-Chinese banks like ANZ,

HSBC HSBC Holdings plc ( zh, t_hk=滙豐; initialism from its founding member The Hongkong and Shanghai Banking Corporation) is a British universal bank and financial services group headquartered in London, England, with historical and business li ...

and

Banco do Brasil Banco do Brasil S.A. (, ) is a Brazilian financial services company headquartered in Brasília, Brazil. The oldest bank in Brazil, and among the oldest banks in continuous operation in the world, it was founded by John VI, King of Portugal, on ...

earlier in the year. 35.7 billion yuan in dim sum bonds were issued in 2010 and 131 billion in 2011. The first foreign-issued dim sum bond by a nonfinancial company was announced on August 19, 2010 and issued on September 16, 2010 by

McDonald's McDonald's Corporation, doing business as McDonald's, is an American Multinational corporation, multinational fast food chain store, chain. As of 2024, it is the second largest by number of locations in the world, behind only the Chinese ch ...

. On 5 November 2013,

British Columbia British Columbia is the westernmost Provinces and territories of Canada, province of Canada. Situated in the Pacific Northwest between the Pacific Ocean and the Rocky Mountains, the province has a diverse geography, with rugged landscapes that ...

finance minister

Mike de Jong Michael de Jong (born 1963 or 1964) is a politician in the Canadian province of British Columbia. He was a member of the Legislative Assembly (MLA) of British Columbia, representing the electoral district of Matsqui from 1994 to 2001, Abbot ...

reported a successful placement of Chinese RMB$2.5bn in dim sum bonds, listed January 14, 2014 on the

Luxembourg Stock Exchange The Luxembourg Stock Exchange, LuxSE () is based in Luxembourg City at 35A boulevard Joseph II. The chairman of the board is Alain Kinsch and the chief executive officer is Julie Becker. History A law establishing a stock exchange in Luxemb ...

. The issue was five times oversubscribed. Some Indian companies participate in the dim sum bond market, one of them being IL & FS Transportation networks (a subsidiary of the giant lender IL & FS Financial Services).

Sources

{{reflist Bonds in foreign currencies Renminbi

History and use

See also

Sources