Illustration: Xia Qing/GT
Dim sum bonds – yuan-denominated bonds issued outside the Chinese mainland, mainly in Hong Kong – have hit a new high so far this year, eclipsing the full-year 2024 record. This marks the eighth straight year of growth, public data showed. Analysts and industry insiders said the data signaled a vote of confidence in China’s economy and yuan stability.
Bloomberg reported on Monday that sales of dim sum notes have totaled about 870 billion yuan ($123 billion) so far this year, surpassing the unprecedented full-year tally in 2024 and marking an eighth consecutive year of expansion.
According to domestic financial and economic data provider Wind, dim sum bond issuance has grown rapidly since 2022, with the annual total first exceeding 1 trillion yuan in 2024.
As of December 1 this year, 1,236 dim sum bonds had been issued, totaling 1.1058 trillion yuan – again surpassing the trillion-yuan mark. Reports vary slightly due to the inclusion of certificates of deposit, insiders explained.
The surge in dim sum bond issuance reflects the yuan’s advancing internationalization and growing demand for cross-border asset allocation, especially from investors seeking to be insulated from US dollar cycles and global volatility, making these bonds a key choice for international investors seeking to optimize their portfolios, analysts said.
“Dim sum bonds are an important offshore yuan product. The booming dim sum bond market highlights the rising attractiveness of yuan-denominated assets, offering investors a reliable alternative for diversification and steady yields,” Yang Delong, chief economist at Shenzhen-based First Seafront Fund, told the Global Times on Monday.
From a broader perspective, this growth signals the steady advancement of yuan internationalization, driven gradually by global trends, supportive policies, and rising demand. China’s expanding economic influence and its greater trade and investment openness provide solid structural backing for wider cross-border yuan usage, Yang said.
Overall dim sum bond issuance has grown significantly this year, driven mainly by technology companies and local governments. Rising market enthusiasm has also boosted average subscription ratios, a Beijing-based private fund manager surnamed Qi told the Global Times on Monday.
“Issuers have become increasingly diverse in recent years, expanding from large state-owned enterprises and financial institutions to tech firms and high-quality private companies, covering a broader range of the real economy,” said Qi.
According to a report by the London Stock Exchange Group (LSEG) in July, non-financial dim sum issuance increased fivefold during the 2020-2024 period, compared with the previous five years, reflecting growing use of the offshore yuan by non-financial firms as an alternative source of funding.
About one-fourth of the non-financial corporate dim sum issuers were foreign companies, the LSEG report said.
Qi noted that dim sum bonds are attractive to issuers because their average yields are lower than US dollar bonds, effectively reducing offshore financing costs. “For investors, yuan denomination eliminates exchange-rate risks,” Qi added.
Rising dim sum issuance directly bolsters the yuan’s global value and use, which shows that the yuan is evolving from a trade tool to a reserve asset, analysts pointed out.
In the current environment of high US dollar interest rates, an increasing number of emerging markets and enterprises are showing strong interest in entering China’s dim sum bond market.
For example, Indonesia raised 6 billion yuan through its first-ever yuan-denominated bond in late October, in its latest effort to diversify funding sources and broaden its global investor base, the Jakarta Post reported.
Total orders reached about 18 billion yuan, or three times the issuance size, the report said.
“The Government of Indonesia’s inaugural issuance of dim sum bonds sets a precedent for sovereign institutions in Southeast Asia for issuing public bonds denominated in offshore yuan,” said Bank of China (Hong Kong), which was one of the lead managers and bookrunners of the bond.
International institutions have highlighted the trend of the growing presence of the yuan in global usage.
“Our examination of the most recent data on yuan usage – for trade settlement, investment, and safe asset and reserve allocation – indicates a two-track pattern. Chinese firms have steadily expanded their use of the yuan for trade settlement, but the currency’s global presence remains limited and lags behind the US dollar,” said Betty Wang, head of Northeast Asia research at Oxford Economics, in a note sent to the Global Times.
According to data released by Oxford Economics, the yuan’s share of cross-border settlements in global trade increased from 28.4 percent in 2020 to 64.1 percent in 2024.
“In the near term, we expect the authorities to focus on promoting yuan trade settlement and invoicing, expanding pilot programs for yuan financing, enhancing offshore market liquidity and product offerings under the capital account, and refining financial-market infrastructure and regulations,” said Wang.