It has been three years since China launched the landmark Shanghai Free Trade Zone with the area originally envisioned as the blueprint for further reforms throughout the country. While market participants are disappointed by the authorities’ continued grip on capital controls, they are happy with the overall direction of the FTZ scheme.
The Shanghai city government announced this week that it is exploring the possibilities of a free trade zone (FTZ) bond as part of China’s broader goal to provide more onshore renminbi products for international investors.
China’s push for an onshore CNH bond market is quickly taking shape with Shanghai International Port Group (SIPG) mandating Bank of China (BoC) to arrange a sale. But the scheme’s biggest challenge is likely to be overcoming the market’s widespread scepticism. Carrie Hong and Rev Hui report.
Regulatory & Policy news
Shanghai Clearing House (SHCH) plans to launch a Shanghai Free Trade Zone (FTZ) offshore renminbi bond market in May, according to documents seen by GlobalRMB.
China is moving forward with plans to open an international bond marketplace in the Shanghai free trade zone (FTZ), with sources telling GlobalRMB that Euroclear is set to link the onshore platform with offshore investors. Separately, plans by competitor Clearstream to help global investors gain standardised access to the China interbank bond market (CIBM) are slated for an October launch.
The Shanghai Clearing House (SHCH) is planning to establish a Shanghai Free Trade Zone (FTZ) bond market. The bonds will be denominated in offshore renminbi and sold to offshore investors, several sources close to the initiative have told GlobalCapital Asia's sister publication GlobalRMB.
Hong Kong-listed China Gas Holdings has broken new ground in China’s Panda bond market, becoming the first corporate issuer to take the deal proceeds offshore, several sources told GlobalCapital Asia's sister publication GlobalRMB this week.
Chinese authorities are set to announce a third batch of free trade zones (FTZs) this year with the preference likely falling on Western provinces. Meanwhile, the regulators have laid out more plans for the original pilot in Shanghai, aiming for the city to become the first to test full liberalisation of the capital account.
The new qualified domestic institutional investor (QDII2) scheme may be the missing link that allows global money managers to really tap into China's potential for outward investment. A necessary condition to that strategy, however, is a corporate structure that until recently was barred to asset managers — the wholly foreign-owned enterprise (WFOE).
Chinese regulators jointly released a new set of guidelines to further push financial reform in the Shanghai Free Trade Zone (FTZ) on October 30. The changes aim to accelerate the opening up of capital account and make Shanghai a genuine international financial centre.
The surprise devaluation of the RMB in August surprised the markets, but banks are still seeing growing interest in the Shanghai pilot free trade zone (FTZ) as a treasury hub that can help manage local and regional liquidity needs. And the Chinese authorities have just pledged more liberalisation in the future.
The Shanghai pilot free trade zone (FTZ) turned two years old at the end of September. In the same month a number of new reforms and milestones were announced, showing the first FTZ still has traction as a business centre for local and foreign businesses in China.
New cross-border financing schemes are being introduced across the four Chinese free trade zones (FTZs), with the newest three, in Guangdong, Fujian and Tianjin, seeing plenty of success after just four months of operations, according to foreign banks.
As China's new three free trade zones (FTZs) in Fujian, Tianjin and Guangdong kick into gear, the original pilot zone in Shanghai is moving forward with capital account reforms to ensure that it remains, true to its nature, the testing ground for Chinese market liberalisation.
Cifi Holdings (Group) Co, a Chinese real estate developer, made its second venture into the offshore renminbi bond market on Tuesday, taking Rmb1.6bn ($233m) from a tightly priced issuance.
- China takes strategic approach with proposed new FTZs
- Direct euro-RMB trading launches, CIPS and offshore lending next
- Savings vs costs: market weighs up Shanghai's FTZ as anniversary approaches
- 'Scepticism' over FTZ negative list reforms as experts say foreign corps still wary
- Shanghai Free Trade Zone culls negative list
- China-wide RMB sweeping is logical next step, say banks
- Free trade accounts a big step for Shanghai FTZ
- PBoC issues docs to promote RMB cross-border business in Shanghai FTZ
- Third-party RMB cross-border payment scheme kicks off in Shanghai FTZ
- PBoC to reveal Shanghai FTZ rules this week – reports
- Shanghai to establish new cash pooling reforms as Beijing preps other FTZs
- Cross-border RMB derivatives in store for Shanghai FTZ
- China set to establish more FTZs in a year
- PBoC airs possibility of debt guarantees from FTZ
- FTZ fails to alleviate issues of trapped cash
- Underneath Shanghai’s FTZ unveiling: a dearth of details
- MNCs’ cost of funding to cheapen in FTZ
- Market cautiously applauds Shanghai Free Trade Zone
Two international banks announced this week that they had helped clients complete two way RMB sweeping transactions outside the Shanghai pilot free trade zone (FTZ). Chinese regulators expanded the pilot scheme to the entire country in November 2014.
BNP Paribas Investment Partners (BNPP IP), the asset management arm of of the French bank, has opened a subsidiary in the Shanghai Free Trade Zone (FTZ), to complement its two branches there and its existing onshore joint venture.
Westpac Banking Corporation (Westpac) this week opened its first sub-branch in the Shanghai Free Trade Zone (FTZ) in what is the latest attempt by the Australian bank to leverage the opportunities expected to come from China’s economic and financial market liberalisation.
- StanChart takes RMB cross-border sweeping beyond the FTZ
- Citi hails China-London automatic RMB sweeping
- BAML offers centralised payments for US client in China
- ICBC in first Singapore-FTZ RMB treasury funding
- UOB joins the FTZ crowd, hopeful of more reform
- HSBC helps pave the way for renminbi globalisation
- BEA brings electronic cross-border renminbi payments to Shanghai FTZ
- Westpac looks for opportunities with Shanghai FTZ move
- Citi launches new treasury centre solution in Shanghai's Free Trade Zone
- DBS in Shanghai FTZ trade financing first, HSBC opens sub-branch
- RMB sweeping can cut costs and improve capital, says Dover - interview
- Shanghai FTZ cross-border sweeping rollout attracts corporate interest
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Latest news by market and league table performance
GlobalRMB Panda Bonds league table
|Rank||Arranger||Share % by Volume|
|1||Bank of China (BOC)||21.85|
|2||China Merchants Securities Co||14.67|
|3||Industrial and Commercial Bank of China (ICBC)||14.44|
|4||Agricultural Bank of China (ABC)||8.89|
Panda Bond Database
|Pricing Date||Issuer||Country||Size Rmb (m)|
|1||10-Jul-19||BMW Finance N.V.||Germany||3,500|
Offshore RMB Bond Top Bookrunners
|Rank||Bookrunner||Share % by Volume|
|1||Standard Chartered Bank||32.50|
|4||Bank of China (Hong Kong) (BOCHK)||6.22|
|4||Bank of Communications Hong Kong Branch (BOCOM HK)||6.22|
Latest Offshore RMB Bonds
|Pricing Date||Issuer||Country||Size Rmb (m)|
|2||22-May-19||Agricultural Development Bank of China (ADBC)||China||3,000|
|3||16-Apr-19||ICBC Singapore Branch||China||1,000|
|4||10-Apr-19||Bank of China Macau Branch (BOC Macau)||China||4,500|
|5||15-Mar-19||Bank of Communications Hong Kong Branch (BOCOM HK)||China||2,500|