Trillions of offshore RMB bid farewell to the "anchorless era" as the first offshore RMB bond valuation and index are released.
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Over one trillionoffshoreRMBworldwide may be ushering in a more considerate“measure”.
In early July, Postal Savings Bank of China,CITIC Bank, and ChinaChengxin Index jointly launched offshore RMB bond valuation and index products. This is the first offshore RMB bond benchmark product launched by domestic institutions, providing more transparent and quantitative pricing reference for the offshore RMB bond market.
This is the first time that commercial banks and third-party rating agencies have jointly introduced offshore RMB bond valuation products,covering over 90% of existing bonds. Meanwhile, relevant institutions have alsolaunchedoffshore RMB bond indexes stratified by credit dimensions.
What does the "measure"look like?
So-called“offshore RMB bonds” refer tobonds issued outside mainland China and denominated in RMB.Among them,the most common are those issued in Hong Kong,“Dim Sum Bonds”.
Previously, offshore RMB bonds had no official pricing, and different intermediaries’ quotes could vary significantly.
This new valuation for offshore RMB bonds jointly released by Postal Savings Bank, CITIC Bank, and ChinaChengxin Index integrates multi-source data such as market transaction prices and real-time quotations. To a certain extent, it can provide fair pricing grounds for the market and improve the offshore RMB bond market.
Relevant institutions have also simultaneously launched offshore RMB bond index products, not only making it convenient for investors to gauge profit and loss levels in the market; but also allowing investors to refer to sub-indices such as government bonds, financial bonds, corporate bonds, etc., with innovative offerings like investment-grade bonds and investment-grade selected bonds. Investors can choose according to their risk preferences.
The "run-too-fast"offshoremarket
In the past two years, as RMB assets have become more attractive, offshore RMB liquidity improves, and financing cost advantages arise from China-US interest rate divergence, the offshore RMB market has almost seen explosive growth.
According to statistics up to end of April 2026, the offshore RMB bond stock circulating only in Hong Kong has exceeded2 trillion yuan; since 2026, the issuance scale of offshore RMB bonds has already surpassed800 billion yuan, with year-on-year growth of over50%.
There is strong demand in the related market for bonds and bond indices.
Supporting“Southbound Connect” expansion
In addition, expanding “Southbound Connect” is also the backdrop for this innovation.
“Southbound Connect”,refers to the southbound collaboration for China mainland and Hong Kong bond market connectivity, a mechanism for mainland institutions to invest in Hong Kong’s bond market via the infrastructure link between mainland and Hong Kong.Simply put, it is a channel for domestic institutions to invest in Hong Kong’s bond market.
SinceJuly 2025, when PBOC announced expanding the range of “Southbound Connect” investors,June 2026, six major insurance companies including China Life, Ping An Life, and Taiping Life were officially approved to invest in Dim Sum Bonds via Southbound Connect and completed their first trades. The activity level of “Southbound Connect” has attracted much attention.
Yan Yan, chairman of ChinaChengxin International Rating,stated at the launch conference of offshore RMB bond valuation and index products:“With the rapid expansion of the offshore RMB bond market, the market demands higher and more urgent requirements for multi-layered and refined price discovery, risk management, and asset allocation tools..”
Continuous improvement, regulated development
The maturity of a financial market largely depends on the completeness of its pricing infrastructure.
With more institutional investors entering and the RMB exchange rate trending towards two-way volatility, investors have begun to put standard clauses for USD bonds onto the negotiating table.This industry standardization for offshore RMB bonds will further facilitate RMB internationalization.
This clearly also helps the maturity of the currentDim Sum Bondmarket.
There have been many similar improvements, such as in earlier years, Dim Sum bond market issuance documents often emphasized:“Events of default applicable to the bonds are limited to non-payment of principal or interest (within the grace period) and liquidation of the issuer. The bonds will not be entitled to negative pledge or cross-default clauses.”Now this situation is improving.
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