Foreign governments, international banks and multinational companies are increasingly tapping China’s domestic bond market, as panda bond issuance hit a record high in the first five months of the year.
A total of 11 entities sold 14 panda bonds – yuan-denominated debt instruments issued by foreign entities in mainland China’s onshore market – worth 26.64 billion yuan (US$3.7 billion) in May, up 246 per cent from a year earlier and the highest level on record for the month, according to data compiled by Fareast Credit Rating. Issuance in the first five months of 2026 reached a record 136.5 billion yuan, up 90.3 per cent year on year.
Participants included the governments of Kazakhstan and Pakistan, as well as Deutsche Bank, Morgan Stanley, BNP Paribas, Volkswagen and Henkel.
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Kazakhstan raised 3.4 billion yuan through its debut panda bond issue on May 26, while Pakistan issued a 1.75 billion yuan sustainable development bond on May 15, becoming the first South Asian sovereign to tap the market. The deals broadened the range of sovereign borrowers accessing China’s domestic debt market.
Fareast Credit Rating said the two sovereign debuts marked an important step for yuan-denominated financing among Belt and Road Initiative countries and could help extend yuan internationalisation beyond trade settlement into sovereign financing and investment.
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Overseas participation in the market continued to rise. Five of the 11 issuers in May were pure offshore borrowers, raising a combined 13.55 billion yuan and accounting for more than half of the total.
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