Reuters/Fred Dufour
- China will sell a record amount of yuan-denominated sovereign bonds overseas this year, Bloomberg data shows.
- China's Ministry of Finance will issue $3.6 billion of the bonds this quarter in Hong Kong.
- That will bring the annual total to the yuan equivalent of $7.5 billion, the most since is started issuing offshore yuan debt in 2009.
China is on pace to sell a record amount of offshore yuan-denominated sovereign bonds this year, according to Bloomberg, a move that will help boost up the currency's strength and influence abroad.
On Wednesday, China's Ministry of Finance said it plans to issue $3.6 billion, or 26 billion yuan, of offshore debt in Hong Kong this quarter.
Year-to-date, that brings the total to about $7.53 billion, or 55 billion yuan, the highest volume on record since China first issued offshore sovereign notes in 2009, per Bloomberg.
Ultimately, the more China can spread its debt, the longer its reach in the world's financial markets. The Ministry of Finance's move is also a bid to keep the currency from weakening further, as it is hovering near a record low offshore.
More broadly, China's economy has struggled to gain momentum coming out of the pandemic. The post-lockdown rebound has yet to materialize, and experts have cautioned that the property sector could be teetering on a Lehman moment.
"If we think about the 2008 collapse in the US property market, driven by excessive wealth plowed into real estate, versus what's happening in China with much higher amounts of wealth in that sector, the scale and severity of the crisis is potentially much much worse than what happened 15 years ago in the US," William Hurst, deputy director for the Centre for Geopolitics at the University of Cambridge, told Insider previously.
In a new report, the International Monetary Fund lowered its economic outlook for the country, cutting its growth outlook on China from 5.2% to 5% for 2023. The group also lowered its 2024 growth outlook on China from 4.5% to 4.2%.