Goldman Sachs: RMB bond issuance surges, but deeper markets are needed for lasting internationalization
A Goldman Sachs Asia economics report says issuance of panda bonds and dim sum bonds rose by more than 60% year over year in the first half of 2026.
A Goldman Sachs Asia economics report says issuance of panda bonds and dim sum bonds rose by more than 60% year over year in the first half of 2026. International issuers accounted for roughly 50% of issuance, maturities lengthened and costs declined, while the issuer base shifted from short-term local government financing vehicles toward international financial institutions and technology companies.
Panda bond issuance totaled RMB 160 billion in the first half, with approximately RMB 495 billion outstanding. Dim sum bond issuance totaled RMB 358 billion, with approximately RMB 157.8 billion outstanding.
For three-year bonds, the weighted average yield on dim sum bonds fell from 3.5% to 2.1%, while the weighted average yield on panda bonds declined from 3.5% to 1.8%.
However, outstanding market sizes were only approximately $60 billion for panda bonds and $208 billion for dim sum bonds, far below the $1.4 trillion AEJ G3 market. Secondary-market liquidity also remains relatively thin.
The report’s conclusion is that the current boom in RMB bond issuance represents a historic opportunity, but lower financing costs alone cannot sustain internationalization. Long-term development will also require economic resilience, greater market depth and stronger links with global finance.
The report identifies potential beneficiaries among RMB internationalization themes, including cross-border payments and offshore financial centers; panda and dim sum bond underwriters, including Chinese banks and Hong Kong Exchanges and Clearing; and international issuers seeking lower-cost RMB financing. It says current market pricing may not yet fully reflect the structural changes represented by this latest bond-market boom.
Potential catalysts cited by the report include data on capital inflows after an expansion of the Southbound Bond Connect quota; progress in launching new fixed-income and currency-trading platforms; and the demonstration effect of more sovereign countries, such as Pakistan and Portugal, issuing RMB bonds.
Panda bond issuance totaled RMB 160 billion in the first half, with approximately RMB 495 billion outstanding. Dim sum bond issuance totaled RMB 358 billion, with approximately RMB 157.8 billion outstanding.
For three-year bonds, the weighted average yield on dim sum bonds fell from 3.5% to 2.1%, while the weighted average yield on panda bonds declined from 3.5% to 1.8%.
However, outstanding market sizes were only approximately $60 billion for panda bonds and $208 billion for dim sum bonds, far below the $1.4 trillion AEJ G3 market. Secondary-market liquidity also remains relatively thin.
The report’s conclusion is that the current boom in RMB bond issuance represents a historic opportunity, but lower financing costs alone cannot sustain internationalization. Long-term development will also require economic resilience, greater market depth and stronger links with global finance.
The report identifies potential beneficiaries among RMB internationalization themes, including cross-border payments and offshore financial centers; panda and dim sum bond underwriters, including Chinese banks and Hong Kong Exchanges and Clearing; and international issuers seeking lower-cost RMB financing. It says current market pricing may not yet fully reflect the structural changes represented by this latest bond-market boom.
Potential catalysts cited by the report include data on capital inflows after an expansion of the Southbound Bond Connect quota; progress in launching new fixed-income and currency-trading platforms; and the demonstration effect of more sovereign countries, such as Pakistan and Portugal, issuing RMB bonds.