McDonalds, Volkswagen, Tesco — they are just a few of the Western companies which have issued offshore bonds denominated in China’s currency, the renminbi, in the past year or so.
The “dim sum” bond market has expanded rapidly in a short space of time, helped by the desire of international companies to get access to funds in an otherwise restricted currency. And why wouldn’t you — China is the world’s second largest economy, its currency is on an appreciation trend — even if slower than the U.S. would like — and growth prospects are still close to double digits, while plenty of Western economies are trying to fight off those minus numbers in their economic data.
China is continuing to open up its offshore renminbi bond market, and London is trying to get in on the act.
Britain’s Treasury said last month, during a trip to China and Japan by Chancellor George Osborne, that the UK government was aiming to complement Hong Kong as a major offshore centre for the renminbi.
More than 100 delegates at a conference in London today turned their backs on the rival attractions of discussions on other BRIC members Brazil and India to listen to a panel on the offshore RMB market.