Dim Sum Bonds Surge as Renminbi Internationalization Gains Momentum

Offshore issuance of renminbi-denominated bonds-known as dim sum bonds-is surging again. This increase reflects favorable yields relative to onshore rates, continued support from major financial centers, and China’s push to internationalize the renminbi.In the first half of 2025, the outstanding amount of dim sum bonds climbed more than 60% from three years earlier to RMB1.27 trillion (about USD179 billion).

Hong Kong remains the leading hub for international bond issuance and offshore renminbi trading in Asia. Much of the outstanding volume over the past decade has come from financial issuers, including local government financing vehicles and state-owned entities that raise funds for public infrastructure projects.

Despite restrictions on Chinese local governments issuing bonds directly, issuance from corporate borrowers is rising amid higher demand. Global companies are seeking access to renminbi-based liquidity. Chinese technology firms including Tencent Holdings, Baidu and alibaba are tapping into this growing offshore market.

In 2024, Alibaba sold its first dim sum bond worth CNH17 billion (about USD2.4 billion); Baidu followed with a CNH4.4 billion (USD616 million) issue in September; and Tencent recently announced plans for a debut offering. these firms, with extensive overseas operations, are raising funds at attractive terms to finance offshore investments. About 75% of nonfinancial corporate issuers – mostly from the construction and real estate sectors – are based in mainland china, while foreign issuers, primarily in energy and mining, make up the remainder.

Drivers of Market Growth

The resurgence in dim sum bond issuance reflects economic, structural and policy factors supporting the renminbi’s growing global role.

China launched its cross-border trade settlement pilot in 2009 to promote renminbi use and reduce dependence on the U.S. dollar. Sixteen years on, about 30% of China’s USD6.2 trillion in global trade is settled in renminbi, according to People’s Bank of China Deputy Governor Zhu hexin – up from only single-digit levels just over a decade ago. For issuers, average yields in China’s offshore renminbi market remain attractive compared with debt denominated in other major currencies, including the U.S. dollar. With China’s economy experiencing some deflation, monetary policy has stayed accommodative for an extended period, narrowing yield premiums on onshore debt.

Developing investment options for renminbi holders is also central to China’s currency internationalization strategy.