{
    "success": true,
    "data": {
        "id": 1719469,
        "msgid": "us-banks-scramble-for-yuan-goldman-sachs-leads-the-pack-1777982001",
        "date": "2026-05-05 17:40:21",
        "title": "US Banks Scramble for Yuan, Goldman Sachs Leads the Pack",
        "author": "",
        "source": "CNBC",
        "tags": "",
        "topic": "Finance",
        "summary": "US banks are aggressively issuing dim sum bonds in Hong Kong to tap into low-cost yuan funding, with Goldman Sachs leading by raising 32.1 billion yuan this year, accounting for 10% of the market's total issuance of 300 billion yuan in 2026. This surge, more than double last year's record, aligns with Beijing's push to internationalise the yuan through expanded access for mainland investors and reflects a shift in global funding dynamics as the offshore yuan fills the void left by Japan's yen amid rising Japanese borrowing costs. The trend benefits foreign issuers with cheaper funding options while offering Chinese investors higher yields than domestic bonds.",
        "content": "<p>US banks are increasingly aggressive in seeking funds in the Chinese\nyuan, or renminbi. This trend is driven by relatively low borrowing\ncosts in China, while Chinese investors seek higher-yielding instruments\nin Hong Kong. This combination makes the dim sum bond market\nincreasingly attractive. Dim sum bonds are bonds issued offshore,\ntypically in Hong Kong, but denominated in yuan. For foreign borrowers,\nthese instruments offer relatively cheap funding costs. For Chinese\ninvestors, the products provide higher returns than domestic bonds.\nAccording to the Financial Times, dim sum bond issuance reached 300\nbillion yuan, or about US$44 billion, throughout 2026. This figure is\nmore than double the same period in 2025, which also set a record.\nGoldman Sachs Most Aggressive Self-led issuance by US banks has surged\nto 47.5 billion yuan this year, a new record, with Goldman Sachs as the\nlargest contributor. Goldman Sachs has issued dim sum bonds worth 32.1\nbillion yuan this year. That amount equates to about 10% of total dim\nsum bond issuance. With this achievement, Goldman has become the largest\nforeign issuer in the offshore yuan bond market. Isaac Wong, Head of\nFixed Income, Currencies and Commodities Distribution at Goldman Sachs\nfor Asia excluding Japan, said demand for offshore renminbi assets is\nvery strong. \u201cThere is so much demand for offshore renminbi assets. This\nprovides an attractive alternative funding source for companies,\u201d Wong\nsaid, quoted from the Financial Times. Flocking to the Yuan Market,\nForeigners Seek Cheap Funds It is not only Wall Street banks that are\nutilising this market. Several countries and government institutions are\nalso issuing yuan bonds in the offshore market. This month, Portugal,\nFinland\u2019s MuniFin, and Korea Development Bank issued yuan bonds.\nPreviously, the Nordic Investment Bank and Swedish Export Credit\nCorporation had already entered the dim sum bond market. Yuan bond\nissuers are now increasingly diverse, from Indonesia to Morgan Stanley.\nThis situation shows that the dim sum bond market is no longer just an\narena for Chinese issuers but is beginning to become a funding source\nfor global borrowers. The key to the market\u2019s bustle lies in differing\nneeds. Chinese investors need instruments with higher yields because\ndomestic bond yields are very low. Meanwhile, foreign investors see Hong\nKong as a market that can provide cheaper funding costs compared to many\nother global markets. China\u2019s 10-year government bond yield is currently\naround 1.75%. By comparison, the coupon on Goldman Sachs\u2019 10-year dim\nsum bond is 3%. Beijing Gains Momentum, Goldman Converts Funds to US\nDollars The surge in dim sum bond issuance aligns with Beijing\u2019s agenda\nto expand the use of the yuan in global financial markets. China wants\nthe yuan to be used more abroad, not just as a transaction currency but\nalso as a funding currency. One way is by expanding access to the Bond\nConnect programme, a scheme that allows mainland Chinese investors to\nbuy fixed-income products in Hong Kong. Last year, access to this\nprogramme was opened for the first time to insurance companies and\nnon-bank financial institutions. That policy has increased capital flows\nfrom mainland China to Hong Kong\u2019s bond market. At the same time, the\noffshore yuan market has become deeper and more attractive to foreign\nissuers. At the China Development Forum last month, China\u2019s central bank\ngovernor Pan Gongsheng also emphasised the push to strengthen monetary\nand financial cooperation to develop the offshore yuan market. For\nBeijing, this trend is more than just foreign banks seeking cheap funds.\nThe more global issuers borrow in yuan, the greater the opportunity for\nChina\u2019s currency to strengthen its position as an international funding\ncurrency. On the other hand, Goldman Sachs does not use the funds from\ndim sum bond issuance for its operations on the mainland. The yuan funds\nraised in Hong Kong are converted to US dollars, while exchange rate\nrisk is hedged. This allows the funds to be used more flexibly across\nGoldman Sachs\u2019 various business lines and jurisdictions. Additionally,\nyuan raised in Hong Kong is not subject to China\u2019s strict cross-border\ncapital controls like on the mainland, making the offshore renminbi\nmarket more attractive to foreign issuers. Yuan Fills the Space Left by\nJapan\u2019s Yen The rise in yuan borrowing indicates an important change in\nthe global funding market. Offshore yuan is starting to take on some of\nthe role previously played by the Japanese yen as a cheap funding\ncurrency. For years, the yen was a choice due to its low borrowing\ncosts. However, in the last two years, the yen\u2019s appeal has waned after\nJapanese borrowing costs rose sharply. Offshore yuan is thus starting to\nbe considered as an alternative funding option, especially as choices\nfor low-cost currencies become more limited. This is even more evident\nin long tenors, when Japanese bond yields have risen much higher than in\nprevious years. Japan\u2019s 10-year government bond yield has now risen\nabove 2.4%, from 0.61% at the beginning of 2024. Meanwhile, China\u2019s\n10-year government bond yield fell below Japan\u2019s for the first time last\nNovember. With these conditions, offshore yuan is now not only an\nalternative cheap funding option for global banks but also part of the\nchanging landscape of international funding.<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/us-banks-scramble-for-yuan-goldman-sachs-leads-the-pack-1777982001",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}