The birth of the dim sum bond market, offshore renminbi debt sold outside China, was a gift to headline writers keen on food-related puns. But it also provided something much needed for international investors: a new way to invest using the Chinese currency.
After a period of rapid growth, this year appetite for dim sum bonds has cooled as China speeds up the opening of the far bigger domestic renminbi credit market. Though not an immediate prospect, some observers are beginning to wonder whether the dim sum market is now on borrowed time.
Chinese authorities have taken a number of steps this year to open the onshore market to more foreign involvement. In May, more than 30 overseas financial institutions, including HSBC, Morgan Stanley and BNP Paribas, were given regulatory approval to access the interbank bond market by the People’s Bank of China.