China-debt sale China to sell yuan bonds in Hong Kong

HONG KONG, Aug. 3 (Yonhap) -- China will sell yuan-denominated government debt in Hong Kong soon as part of its efforts to promote the international use of its currency, the government said Wednesday. The Chinese Ministry of Finance said that it will issue sovereign bonds totaling 20 billion yuan (US$3.11 billion) in the Chinese currency shortly through Hong Kong markets. It is the third time for China to issue yuan government bonds in Hong Kong. China sold its first sovereign bonds in Hong Kong in September 2009, raising 6 billion yuan Out of the total amount, 15 billion yuan in sovereign bonds will be issued for institutional investors and 5 billion yuan in sovereign bonds will be for retail investors. The 20 billion yuan amount for the planned issuance of yuan-based sovereign bonds exceeds the aggregate of bond issuances in the past two years, government officials said in Hong Kong. China has been seeking to reduce its reliance on the U.S. dollar and promote the yuan as a global currency. The country currently does not have full capital account convertibility and has capital controls that limit the trading of its currency at market rates. Such measures have resulted in the lack of the currency's liquidity, the most important quality necessary for a currency to gain international status. In a step toward internationalizing the Chinese currency, Beijing has allowed foreign companies to issue so-called dimsum bonds, which are denominated in yuan and issued in Hong Kong.