The Province of British Columbia has received approval from the Peoples' Bank of China to become the first sovereign government to establish a Panda bond program in China s onshore Renminbi (RMB) market, Finance Minister Michael de Jong announced today.
The program’s approval now gives the Province unparalleled access to one of the largest capital markets in the world and is a significant step forward in supporting greater trade and investment opportunities with China.
The RMB 6 billion program, which was approved by the Peoples’ Bank of China and the National Association of Financial Market Institutional Investors, includes pre-approved conditions for subsequent bonds to a maximum of RMB 3 billion each and terms of up to 10 years.
de Jong announced the news in Beijing, where he is meeting with government officials and financial institutions about the next steps forward. While details on a specific bond are to be determined, it is anticipated the Province will enter the on-shore renmimbi market sometime in 2016.
The program’s approval builds on the Province’s success in the offshore RMB bond market in 2013 and 2014 when it raised nearly C$1 billion through two bonds. Those were followed by the announcement that Canada had been designated as an RMB trading hub, allowing for the use of RMB in B.C.-China trade and more efficient investment for Canadian financial institutions.
Finance Minister Michael de Jong –
“China is a key partner for British Columbia in the Asia-Pacific region, and the approval of a domestic bond program gives us even greater access to a new, diverse group of investors.
“The significance of Chinese authorities and B.C. collaborating to open China’s domestic bond market will not be lost on other sovereign governments. Our program merges the best practices in the international and China capital markets and affirms cause for confidence in the internationalization of China's currency.
“Our prudent fiscal management, stable economic outlook and Triple-A credit rating have afforded us these opportunities, and we are proud to pave a new path forward for other foreign governments looking to access the emerging Chinese markets.”
Establishment of Canadian RMB hub (Nov. 2014): https://news.gov.bc.ca/stories/bc-welcomes-establishment-of-canadian-rmb-hub
Issuance of B.C.’s second RMB bond (Nov. 2014): https://news.gov.bc.ca/stories/successful-second-renminbi-bond-reinforces-bcs-commitment-to-china
Issuance of B.C.’s first RMB bond (Nov. 2013): https://news.gov.bc.ca/stories/successful-renminbi-bond-signals-new-level-of-china-canada-relations
Audio clips of Minister deJong are available online: