Central Banker Frowns on Outflow of ‘Panda Bond’ Proceeds

A senior central banker has expressed dissatisfaction with some overseas entities’ practice of raising money in China’s domestic bond market only to quickly move it abroad, even though the practice is allowed.

Beijing has encouraged overseas governments, businesses and financial institutions to raise funds on the Chinese mainland by issuing onshore yuan-denominated bonds, better known as “panda bonds,” in a bid to widen foreign access to its bond market. At the end of last year, the total amount of panda bonds issued reached nearly 200 billion yuan ($29.6 billion), said Pan Gongsheng, a deputy governor of the People’s Bank of China, the nation’s central bank.