Economía 25-10-2017

China to issue sovereign bonds in dollars for the first time in 13 years

On Tuesday, the Chinese Ministry of Finance explained why it decided in early October to issue $ 2 billion worth of sovereign bonds in the Hong Kong stock market, Xinhua news agency reported.

Although this official organization has indicated that China enjoys continued economic growth, has large foreign exchange reserves and does not need external financing, it believes that these bonds will promote the internationalization of its financial system and will help foreign investors to better understand the economy of that country.

In addition, the ministry believes that the issue will favor the balance of the foreign debt structure of the Asian giant, which last year amounted to 18.1 billion dollars. This figure is well below the international average and represents 1.06% of China's national debt.

Bonds at 5 and 10 years

The date of sale of these 5-year and 10-year sovereign bonds - $ 1 billion each option - is still unknown. This is the first time China has made such a decision since October 2004, when it obtained $ 1.7 billion for a similar operation.

Regarding the downgrade of China's sovereign credit rating by Moody's and S & P Global Ratings, the Chinese Ministry of Finance stressed that this is a misinterpretation of the country's economic processes and development capacity and held that international investors will have the possibility to evaluate the economic situation objectively.