China to Let Overseas Banks Sell Yuan Debt, Economic Times Says

By Mark Lee

Nov. 29 (Bloomberg) -- China will let locally incorporated units of overseas banks sell yuan-denominated debt in Hong Kong as early as next year, the Hong Kong Economic Times reported today.

Yuan bond sales by foreign-controlled banks will probably be smaller than similar transactions by Chinese financial firms as the government seeks to limit currency-exchange risks, the Hong Kong-based newspaper said, citing people it didn’t identify.

Five Chinese financial companies including Bank of China Ltd. and China Construction Bank Corp. have sold 22 billion yuan ($3.2 billion) of bonds in Hong Kong since 2007, the Chinese-language newspaper said.

China opened its financial industry in December 2006, letting overseas banks including HSBC Holdings Plc and Citigroup Inc. set up locally incorporated units to offer deposit and bank cards services.

To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net