The Ministry of Finance of the People's Republic of China successfully auctioned the fourth tranche of 150 billion yuan in RMB government bonds for 2026 in the Hong Kong Special Administrative Region on August 5, targeting institutional investors. The issuance saw strong demand, with a subscription multiple of 4.67 times.

Zhu Hualei, a senior investment advisor at Shaanxi Jufeng Investment Information Co., Ltd., noted that the high subscription multiple for the Ministry of Finance's offshore RMB bond issuance in Hong Kong reflects international market recognition of China's sovereign credit and RMB assets. Additionally, it helps refine the offshore RMB yield curve, bolstering Hong Kong's status as an offshore RMB hub and advancing the steady development of RMB internationalization.

Among the bonds issued, the 2-year tranche totaled 5 billion yuan with a coupon rate of 1.27%, the 3-year tranche was 4 billion yuan at 1.30%, the 5-year tranche was 4 billion yuan at 1.43%, the 15-year tranche was 1 billion yuan at 1.99%, and the 30-year tranche was 1 billion yuan at 2.24%.

Yuan Shuai, vice secretary-general of the Zhongguancun Internet of Things Industry Alliance, stated that the successful bond issuance provides a highly informative benchmark for pricing offshore RMB debt instruments. It further strengthens the pricing foundation of the offshore RMB bond market, creating a favorable environment for more diverse issuers to enter the offshore market. The varying maturities covered in the issuance cater to diverse needs, from short-term liquidity allocation to long-term asset duration adjustments, aligning precisely with current investment preferences for offshore RMB funds.

With State Council approval, the Ministry of Finance plans to issue 840 billion yuan in RMB government bonds in Hong Kong across six tranches in 2026, an increase of 160 billion yuan from 2025, continuing the trend of recent expansion. Following the successful issuance of the fourth tranche, the progress rate has reached 71%, with two remaining tranches totaling 245 billion yuan yet to be issued.

Zhu Hualei added that the regular issuance of RMB government bonds by the Ministry of Finance in Hong Kong consistently enriches the supply of offshore RMB bonds, establishing a complete yield curve to serve as a pricing benchmark for various RMB assets in the offshore market. It also continues to attract foreign institutions to allocate to RMB assets, enhancing their willingness to hold such assets, elevating the international recognition of the renminbi, and steadily advancing the process of RMB internationalization.

Yuan Shuai noted that over the long term, the regular issuance mechanism sends a clear signal to global markets about China's commitment to high-level opening of its financial markets. It can also drive the development of related industries such as bond underwriting, asset management, and financial services in Hong Kong, further strengthening Hong Kong's role as a bridge connecting mainland financial markets with global financial markets.