For domestic funds, they mainly leave the country through QDII fund channels, and then directly invest in US dollar bonds or offshore investment funds in China. For ordinary investors, investing in China dollar bonds is mainly to buy QDII products issued by securities asset management, fund companies and other institutions.
Overseas funds can directly invest in China dollar bonds or buy offshore investment funds. For ordinary investors, Public Offering of Fund can be bought and invested by professional funds. Of course, if you meet the requirements of professional investors, you can also open an account with a licensed securities company in Hong Kong for direct investment.
What is China's dollar debt?
The global bond market can be roughly divided into three categories: local currency bonds, foreign bonds and European bonds. Local currency bonds mainly refer to bonds issued by domestic enterprises in local currency; Foreign bonds are bonds issued by foreign enterprises in other countries in the currency of that country; Eurobonds are bonds issued by foreign enterprises in other countries in the foreign currency of the host country, such as Eurodollar bonds. Among them, Eurodollar bonds are the largest variety of European bonds, and China dollar bonds are an important branch.
Chinese-funded dollar bonds refer to bonds issued by Chinese-funded enterprises (including domestic enterprises or overseas enterprises or branches controlled by them) in the offshore bond market, borrowed from overseas, denominated in US dollars, and repaid the principal and interest as agreed. Based on the background of Chinese-funded enterprises, Chinese-funded dollar bonds are also commonly known as "Kung Fu bonds" in the financial industry.
Simply put, China dollar debt is a way for domestic enterprises to issue bonds overseas. It is denominated in US dollars, and finally the principal and interest are paid in US dollars, which belongs to US dollar assets. At present, it is mainly traded in Hong Kong, Singapore, Germany and other regions, among which real estate dollar bonds and city investment dollar bonds are relatively concentrated on the Hong Kong Stock Exchange.
Comparison between China dollar bonds and RMB bonds
In the issuance market, China dollar bonds are in overseas markets such as Hongkong and Singapore, and RMB bonds are in the mainland bond market.
In the approval process, China dollar bonds are registered with the National Development and Reform Commission, and the whole issuance process takes about 6- 10 weeks. Renminbi bonds need to be approved by the CSRC /NDRC/ CBRC/central bank and other departments, and the time is relatively slow.
In terms of issuance rating, China dollar bonds are not subject to compulsory rating, which may be lower than expected due to the long time-consuming international rating and the unfamiliarity of overseas institutions with China enterprises. At present, most China dollar bonds are not rated. Among the rated China dollar bonds, the rating standards are mostly Standard & Poor's BBB- and above, Fitch Baa3 and above, and Moody's Baa and above. The issuance of RMB bonds requires subject rating, and the rating agencies are several common rating companies in China.
As for investors, China dollar creditors are mainly high-net-worth customers such as domestic financial institutions, overseas hedge funds and private banks. Renminbi bonds are mainly domestic financial institutions, domestic private equity funds and a few high-net-worth customers.