Beijing’s US$4 billion bond sale tests economic outlook after trade truce

China’s Ministry of Finance returned to the international bond market for the first time in a year on Wednesday, offering US$4 billion in sovereign notes and giving international investors a chance to register their opinion on the country’s economic outlook amid receding trade tensions.

The issuance in Hong Kong came just days after a truce in the long-simmering US-China trade dispute and followed Beijing’s unveiling of its 15th five-year plan for economic and social development.

The offering of US dollar-denominated notes, equally split between three- and five-year notes, attracted US$118.2 billion in subscriptions, equal to 30 times the notes on offer, according to a ministry statement.

“The Ministry of Finance’s latest issuance has received a very positive response from international investors, reflecting the international market’s strong confidence in the growth potential of China’s economy,” said David Liao Yi-chien, co-CEO for Asia and the Middle East with HSBC, the joint lead manager and joint bookrunner of the deal.

Beijing’s five-year plan “demonstrated the country’s commitment to openness and collaboration”, he added.

Chinese Premier Li Qiang reinforced that message at the opening of the world’s largest import-export fair on Wednesday in Shanghai, where he said all countries must “adhere to equal and mutually beneficial cooperation, embrace free markets and free trade, and resolve cross-border contradictions and problems”.