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The renminbi is the official currency of the People's Republic of China. It is the 5th most traded currency as of April 2022.
A government bond or sovereign bond is a form of bond issued by a government to support public spending. It generally includes a commitment to pay periodic interest,called coupon payments, and to repay the face value on the maturity date.
The China Development Bank (CDB) is a development bank in the People's Republic of China (PRC),led by a cabinet minister at the Governor level,under the direct jurisdiction of the State Council. As one of three policy banks in China,it is responsible for raising funds for large-scale infrastructure projects,including the Three Gorges Dam and the Shanghai Pudong International Airport. Established by the Policy Banks Law of 1994,the bank is described as the engine that powers the national government's economic development policies.
A corporate bond is a bond issued by a corporation in order to raise financing for a variety of reasons such as to ongoing operations,M&A,or to expand business. The term is usually applied to longer-term debt instruments,with maturity of at least one year. Corporate debt instruments with maturity shorter than one year are referred to as commercial paper.
The Shanghai Stock Exchange (SSE) is a stock exchange based in the city of Shanghai,China. It is one of the three stock exchanges operating independently in mainland China,the others being the Beijing Stock Exchange and the Shenzhen Stock Exchange. The Shanghai Stock Exchange is the world's 3rd largest stock market by market capitalization. It is also Asia's biggest stock exchange. Unlike the Hong Kong Stock Exchange,the Shanghai Stock Exchange is still not entirely open to foreign investors and often affected by the decisions of the central government,due to capital account controls exercised by the Chinese mainland authorities.
The bond market is a financial market where participants can issue new debt,known as the primary market,or buy and sell debt securities,known as the secondary market. This is usually in the form of bonds,but it may include notes,bills,and so on for public and private expenditures. The bond market has largely been dominated by the United States,which accounts for about 39% of the market. As of 2021,the size of the bond market is estimated to be at $119 trillion worldwide and $46 trillion for the US market,according to Securities Industry and Financial Markets Association (SIFMA).
The yuan is the base unit of a number of former and present-day currencies in Chinese.
The State Administration of Foreign Exchange (SAFE) of the People's Republic of China is an administrative agency under the State Council tasked with drafting rules and regulations governing foreign exchange market activities,and managing the state foreign-exchange reserves,which at the end of December 2016 stood at $3.01 trillion for the People's Bank of China. The current director is Pan Gongsheng.
The foreign exchange reserves of China are the state of foreign exchange reserves held by the People's Republic of China,comprising cash,bank deposits,bonds,and other financial assets denominated in currencies other than China's national currency. In December 2022,China's foreign exchange reserves totaled US$3.12 trillion,which is the highest foreign exchange reserves of any country.
A Kimchi bond is a non-won-denominated bond issued in the South Korean market. The name refers to kimchi,a Korean side dish. Woori Bank,which is credited with coining the term,defines it as solely referring to bonds from foreign issuers,a definition echoed by the Ministry of Finance and Economy. However,in practice,the term is also used to refer to non-won-denominated bond issuance by domestic entities. Deutsche Bank credits itself as having executed the first kimchi bond transaction,a US$100 million two-year floating rate note sold by South Korean company SK Global,but the first foreign company to sell non-won-denominated bonds in the South Korean market was Bear Stearns. Although foreign firms had long been permitted to issue won-denominated bonds,typically referred to as Arirang bonds,permission for them to issue foreign currency-denominated bonds was slower in coming. Permission was finally granted due to the strength of the won in 2005.
The Qualified Foreign Institutional Investor program,one of the first efforts to internationalize the RMB,represents China's effort to allow,on a selective basis,global institutional investors to invest in its RMB denominated capital market. Once licensed,foreign investors are permitted to buy RMB-denominated "A shares" in China's mainland Shanghai and Shenzhen stock exchanges. Thus foreign investors benefit from an opportunity to invest onshore,which is otherwise often insulated from the rest of the world,and subject to capital controls governing the movement of assets in-and-out of the country.
The United States dollar was established as the world's foremost reserve currency by the Bretton Woods Agreement of 1944. It claimed this status from sterling after the devastation of two world wars and the massive spending of the United Kingdom's gold reserves. Despite all links to gold being severed in 1971,the dollar continues to be the world's foremost reserve currency. Furthermore,the Bretton Woods Agreement also set up the global post-war monetary system by setting up rules,institutions and procedures for conducting international trade and accessing the global capital markets using the US dollar.
Dim sum bonds are bonds issued outside of China but denominated in Chinese renminbi,rather than the local currency. They are named after dim sum,a popular style of cuisine in southern China.
The New Development Bank (NDB),formerly referred to as the BRICS Development Bank,is a multilateral development bank established by the BRICS states (Brazil,Russia,India,China and South Africa). According to the Agreement on the NDB,"the Bank shall support public or private projects through loans,guarantees,equity participation and other financial instruments." Moreover,the NDB "shall cooperate with international organizations and other financial entities,and provide technical assistance for projects to be supported by the Bank."
Since the late-2000s,the People's Republic of China (PRC) has sought to internationalize its official currency,the Renminbi (RMB). RMB internationalization accelerated in 2009 when China established the dim sum bond market and expanded Cross-Border Trade RMB Settlement Pilot Project,which helps establish pools of offshore RMB liquidity. The RMB was the 8th-most-traded currency in the world in 2013 and the 7th-most-traded in early 2014. By the end of 2014,RMB ranked 5th as the most traded currency,according to SWIFT's report,at 2.2% of SWIFT payment behind JPY (2.7%),GBP (7.9%),EUR (28.3%) and USD (44.6%). In February 2015,RMB became the second most used currency for trade and services,and reached the ninth position in forex trading. The RMB Qualified Foreign Institutional Investor (RQFII) quotas were also extended to five other countries —the UK,Singapore,France,Korea,Germany,and Canada,each with the quotas of ¥80 billion except Canada and Singapore (¥50bn). Previously,only Hong Kong was allowed,with a ¥270 billion quota.
A Schengen bond is a bond denominated in offshore Renminbi,and more specifically refers to bonds listed on the Luxembourg Stock Exchange and issued by a Chinese company.
Masala bonds are bonds issued outside India but denominated in Indian Rupees,rather than the local currency. Masala is a Hindi word meaning spices. The term was used by the International Finance Corporation (IFC) to evoke the culture and cuisine of India. Unlike dollar bonds,where the borrower takes the currency risk,Masala bonds makes the investors bear the risk. The first Masala bond was issued by the World Bank-backed IFC in November 2014 when it raised 1,000 ₹10million bonds to fund infrastructure projects in India. Later in August 2015 International Financial Cooperation for the first time issued green masala bonds and raised ₹3.15 Billion to be used for private sector investments that address climate change in India.
Chinese-issued U.S. dollars bonds are dollar-denominated bond issued by Chinese financial institutions and corporations.
Digital renminbi,or Digital Currency Electronic Payment,is a central bank digital currency issued by China's central bank,the People's Bank of China. It is the first digital currency to be issued by a major economy,undergoing public testing as of April 2021. The digital RMB is legal tender and has equivalent value with other forms of renminbi,also known as the Chinese yuan (CNY),such as bills and coins.
References
- ↑ Zhang, Jinghong (2005-09-29). "熊猫债券发行 人民币区域化迈出重要一步 (Issuance of Panda bonds an important stride towards the regionalisation of the renminbi)". Xinhua News Agency. Archived from the original on February 9, 2006. Retrieved 2007-07-06.
- 1 2 Areddy, James T. (2005-10-11). "Chinese Markets Take New Step With Panda Bond". The Wall Street Journal. Retrieved 2007-07-06.
- ↑ "ADB, IFC mark inaugural Panda bond issue". People's Daily. 2005-10-19. Retrieved 2007-07-06.
- ↑ "'Panda' Bond Sellers Authorized to Send Money Home by China Government". Bloomberg. 2010-09-30. Retrieved 2011-09-29.
- ↑ "Poland to issue $455m panda bonds in China - Business - Chinadaily.com.cn". www.chinadaily.com.cn. Retrieved 2016-06-22.
- ↑ "Philippines plans to issue 1-bln-USD Samurai bond - Business - Xinhuanet.com". www.xinhuanet.com. Archived from the original on June 19, 2018. Retrieved 2018-06-19.
- ↑ "PH to pitch panda bonds, 'Build Build Build' in China" . Retrieved 2018-06-19.
