There are three factors that make McDonald's issuing dim sum bonds a good choice. First, the interest rate of dim sum bonds is very low, and the three-year interest rate is only in the early 1%, and the domestic three-year deposits are all 4.75%. The direct reason why the interest rate is so low is that the interest rate of RMB deposits in Hong Kong is even lower, less than 1%. The more fundamental reason is that over the years, Hong Kong has accumulated a large amount of RMB, about 400 billion yuan, but there are no channels to make profits from investment, and the opportunity cost is zero.

Second, McDonald's will use the principal of issuing bonds for domestic operations, which can naturally hedge the currency exchange rate exposure of assets and liabilities. Okay, it's a bit of a mouthful. Simply put, McDonald's assets, income, etc. In China, all accounts are kept in RMB, but the accounting currency of McDonald's investment in the United States is US dollars. The appreciation of RMB against USD makes McDonald's operations in China directly enjoy the benefits of exchange gains. However, once the RMB depreciates, its income in China will be greatly reduced. Out of prudence, McDonald's would rather give up the gains from appreciation in exchange for not losing money when depreciating. One way is for overseas parent companies to invest directly in RMB. In this way, when the RMB appreciates, both assets and liabilities will increase, and vice versa-there will be no profit or loss due to exchange rate fluctuations. In this way, the company can focus on its own business without being distracted by exchange rate fluctuations.

Third, the principal of McDonald's bonds can be allocated back to China for use with the permission of the regulatory authorities in China. In this way, the principal will not be idle abroad and can be used on the cutting edge. This is an exception, which goes against the original intention of RMB internationalization to some extent. If anyone can issue RMB bonds in Hong Kong at such a low price and then freely transfer them back to China for use, then even if the deposit bank charges interest rates, it can earn risk-free spreads. How can there be such a good thing? Moreover, such capital return will inevitably increase the liquidity of RMB in China and increase inflationary pressure. In the end, the internationalization trend of RMB is likely to collapse. Allowing McDonald's to remit the principal is a decision made by the relevant regulatory authorities after repeatedly weighing the pros and cons. The main purpose is to take advantage of McDonald's international reputation and take the opportunity to "sell" RMB. In addition, capital controls remain unchanged.