China bond issuance in HK to hit 50b yuan

China is on track to issue 50 billion (HK$54 billion) worth of yuan-denominated sovereign bonds in Hong Kong this year.

In addition to the 24 billion yuan already issued, 26 billion yuan will be issued in two phases in the fourth quarter of this year, starting with a first batch of 16 billion yuan on October 25, the Ministry of Finance said.

An increase in such debt issuance will aid Beijing's efforts to bolster the yuan by raising demand for the currency and tightening its supply offshore.

"Supporting the offshore yuan is probably the top goal of the increased issuance. The amount is tiny relative to fiscal aid," said Stephen Chiu, chief Asia FX and rates strategist at Bloomberg Intelligence. "The offshore government debt pool is still too small, and China will have the incentive to boost it for the long-term purpose of yuan internationalization."