The week in renminbi: White House readies trade escalation, the PBoC loosens cross-border FX rules, Tradeweb implements block trading

In this round-up, the White House administration is lining up tariffs covering the entirety of Chinese imports, the People’s Bank of China further relaxes cross-border renminbi trading rules, and Bond Connect’s trading platform Tradeweb goes live with block trading.

  • By Paolo Danese
  • 12 Sep 2018
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The PBoC is ready to broaden the scope of trading for the renminbi further, the central bank said in a document published on September 7.

The bank noted it had already expanded the ability for foreign investors under the Stock Connect and Bond Connect schemes to conduct onshore FX spot and hedging activities. Following the notice, all foreign banks can apply to the China Foreign Exchange Trade System and appoint one of their branches to help conduct cross-border FX business. The PBoC is also expanding the scope of cross-border trading in RMB to any current account activity, and no longer just goods and services trade.


US president Donald Trump is sending his Chinese counterpart clear signals that his escalation on trade war is far from over. Speaking to media aboard the presidential plane Air Force One soon after the formal closing of a period of consultation with the public on further tariffs, he confirmed his intention to stay "strong on China".

 “The $200bn we are talking about could take place very soon depending on what happens with them," said Trump. "To a certain extent it’s going to be up to China. And I hate to say this, but behind that is another $267bn ready to go on short notice if I want. That totally changes the equation.”

Should Trump follow through, he would have imposed tariffs on all of Chinese imports. Further escalation of tariffs would involve raising the levy beyond 25%. Should the $200bn batch be implemented in full this month, that alone would likely drag down China's GDP growth prospect in the 2018 fourth quarter by 0.1% and hit the 2019 figure more heavily, down from 6.4% to 6.1%, Bank of America Merrill Lynch said in a note on September 7.

Larry Kudlow, the top economic adviser to Trump, said in a separate media interview that China had not met US demands so far.

“We are still talking with China on a number of issues ... Those talks will continue to go on. We want lower (trade) barriers across the board,” Kudlow said.

He added that the US was targeting zero tariffs, zero non-tariff barriers, zero subsidies, an end to intellectual property theft, an end to forced technology transfers, and finally allowing Americans to own their own companies operating in China.

“Those have been our asks for many months and so far those asks have not been satisfied,” he said. “However, hope springs eternal.”


Beijing seems to be scrambling to find answers to the Trump dilemma. Senior officials including former central banker Zhou Xiaochuan are set to chair a "China-US Financial Roundtable" on September 16 which, according to media reports, had been hastily arranged in the last few weeks by the Chinese government.

The invitees included chief executives of a number of US financial institutions, including Stephen Schwarzman, chairman of private equity giant Blackstone, as well as the heads of Citigroup, Goldman Sachs, JPMorgan, Morgan Stanley and Hank Paulson, the former US Treasury secretary. Yi Gang, current PBoC governor, is set to attend.

A number of the invitees were, however, set to turn down the invitation due to the tight timeframe of the request, the article added.


Trading platform Tradeweb, the sole channel for Bond Connect investors accessing China’s onshore interbank market, said on September 7 that average daily volume of Chinese bonds trading in August was $500m, down 34.1% from a month earlier but up 115.9% year-on-year. Tradeweb also said in a September 5 announcement that it was implementing block trading for Bond Connect, following the PBoC's related announcement the previous week.

“The launch of block trading via pre-allocation is a significant development for the Tradeweb Bond Connect initiative and another step towards our goal to connect China’s financial market with the rest of the world,” said Lee Olesky, CEO of Tradeweb Markets, in a statement. “We are confident that facilitating block orders in CNY bonds will allow investors greater flexibility to join the scheme, significantly boosting foreign investment into the Chinese domestic bond market.”


Abu Dhabi Global Markets signed up for a collaboration with the Beijing Financial Street Services Bureau in support of the Belt and Road Initiative, the agency said on September 8. The two sides will co-operate in developing financial services in China and Abu Dhabi, as well as facilitate investment. 

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  • By Paolo Danese
  • 12 Sep 2018

GlobalRMB Panda Bonds league table

Rank Arranger Share % by Volume
1 Bank of China (BOC) 21.17
2 China Merchants Securities Co 17.84
3 Industrial and Commercial Bank of China (ICBC) 14.86
4 Agricultural Bank of China (ABC) 10.81
5 China Securities 9.01

Panda Bond Database

Pricing Date Issuer Country Size Rmb (m)
1 17-May-19 Trafigura The Netherlands 540
2 16-May-19 CITIC Pacific China 1,000
3 15-May-19 Republic of the Philippines Philippines 2,500
4 29-Apr-19 Semiconductor Manufacturing International Corp (SMIC) China 1,000
5 29-Apr-19 Semiconductor Manufacturing International Corp (SMIC) China 500

Offshore RMB Bond Top Bookrunners

Rank Bookrunner Share % by Volume
1 Standard Chartered Bank 25.05
2 Credit Agricole 7.04
2 HSBC 7.04
4 Bank of China (Hong Kong) (BOCHK) 6.90
4 Bank of Communications Hong Kong Branch (BOCOM HK) 6.90

Latest Offshore RMB Bonds

Pricing Date Issuer Country Size Rmb (m)
1 22-May-19 Agricultural Development Bank of China (ADBC) China 3,000
2 16-Apr-19 ICBC Singapore Branch China 1,000
3 10-Apr-19 Bank of China Macau Branch (BOC Macau) China 4,500
4 15-Mar-19 Bank of Communications Hong Kong Branch (BOCOM HK) China 2,500
5 13-Mar-19 Daimler International Finance Germany 1,000