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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.
A eurobond is an international bond that is denominated in a currency not native to the country where it is issued. They are also called external bonds. They are usually categorised according to the currency in which they are issued: eurodollar, euroyen, and so on. The name became somewhat misleading with the advent of the euro currency in 1999; eurobonds were created in the 1960s, before the euro existed, and thus the etymology is to "European bonds" rather than "bonds denominated in the Euro currency".
Bank of China (Hong Kong) Limited (Chinese: 中國銀行(香港)有限公司) also known as its short name Bank of China (Hong Kong) or BOCHK (Chinese: 中銀香港), is a subsidiary of the Bank of China (via a Hong Kong-listed intermediate holding company BOC Hong Kong (Holdings)). Bank of China (Hong Kong) is the second-largest commercial banking group in Hong Kong in terms of assets and customer deposits (2008 data), with more than 190 branches across Hong Kong as of the end of 2019. It is also one of the three commercial banks licensed by the Hong Kong Monetary Authority to issue banknotes for the Hong Kong dollar.
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 third 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.
Bank of Communications Limited (BoComm), is the fifth-largest bank in mainland China.
The yuan is the base unit of a number of former and present-day currencies in Chinese.
A Formosa bond is a bond issued in Taiwan but denominated in a currency other than the New Taiwan Dollar. They are issued by the Taiwan branches of publicly traded overseas financial institutions and to be traded must have a credit rating of BBB or higher.
A Panda bond is a Chinese renminbi-denominated bond from a non-Chinese issuer, sold in the People's Republic of China. The first two Panda bonds were issued in October 2005 on the same day by the International Finance Corporation and the Asian Development Bank. Their terms were 1.13 billion yuan of 10-year bonds at a 3.4% yield and 1 billion yuan of 10-year bonds at a 3.34% yield. The Chinese government had been negotiating for several years about implementation details before permitting the sale of such bonds; they had been concerned about the possible effects on their currency peg. Eventually, it was agreed that funds raised from sales of Panda bonds would have to remain in China; issuers would not be permitted to repatriate such funds.
The Luxembourg Stock Exchange, LuxSE is based in Luxembourg City at 35A boulevard Joseph II.
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."
Infinity Group is a private equity fund backed by China Development Bank and Clal Industries. The head of Infinity Group is Amir Gal-Or. Infinity Group manages RMB 10 billion and 100 portfolio companies, through 17 local RMB funds throughout China.
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%), STG (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.
Established in 2011, the Renminbi Qualified Foreign Institutional Investor (RQFII) program is a policy initiative that allows foreign investors who hold the RQFII quota to invest directly in Mainland China’s bond and equity markets. The program represents a continued loosening of China’s capital controls and departure from its predecessor QFII. The RQFII program relaxes existing restrictions on currency settlement, adds permissible asset classes, and expands investor eligibility. The current RQFII relevant jurisdiction applies to financial organizations registered in Hong Kong, Singapore, the United Kingdom, France, Korea, Germany, Australia, Switzerland, Canada, the United States and Luxembourg.
Chinese-issued U.S. dollar bonds are dollar-denominated bond issued by Chinese financial institutions and corporations.
The corporate debt bubble is the large increase in corporate bonds, excluding that of financial institutions, following the financial crisis of 2007–08. Global corporate debt rose from 84% of gross world product in 2009 to 92% in 2019, or about $72 trillion. In the world's eight largest economies—the United States, China, Japan, the United Kingdom, France, Spain, Italy, and Germany—total corporate debt was about $51 trillion in 2019, compared to $34 trillion in 2009. Excluding debt held by financial institutions—which trade debt as mortgages, student loans, and other instruments—the debt owed by non-financial companies in early March 2020 was $13 trillion worldwide, of which about $9.6 trillion was in the U.S.
References
- ↑ "Luxemburger Wort: Bank of China Luxembourg issues first mainland European Renminbi bond" . Retrieved May 15, 2014.
- ↑ "Luxembourg Stock Exchange: XS1066388700 - Bond information - BkChina 3,5% 14-17 15/05s ne" . Retrieved May 15, 2014.
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