General

On October 24, the Ministry of Finance of Hainan Province issued an announcement indicating that the province plans to issue no more than 5 billion yuan of offshore RMB local government bonds at the Stock Exchange of Hong Kong at the right time in October. The issuance period is 2/3/5 years, of which 2 years are blue bonds, and 3 and 5 years are sustainable development bonds. It is understood that this is the first time for Hainan Province to issue local government bonds overseas, and it is also the first time for Chinese local governments to issue blue bonds and sustainable development bonds in the international capital market.

The announcement shows that the issuance of offshore RMB local government bonds by Hainan Province in Hong Kong is to implement the decision of the Twentieth National Congress of the Communist Party of China to adhere to a high level of opening up, accelerate the construction of a new development pattern with the domestic big cycle as the main body and the domestic and international double cycles promoting each other, give full play to Hainan's policy advantages and regional advantages, deepen reform and opening up, promote the construction of a national ecological civilization pilot zone, and strengthen the development of international trade. The raised funds from this issue will be invested in marine economy and marine protection projects, green environmental protection projects, medical and housing and other livelihood security projects, further implement the national marine development strategy, and promote green, low-carbon and sustainable development.

On September 28, the Department of Finance of Hainan Province issued the Announcement of Hainan Province on the List of Members of the Underwriting Group of Hainan Province to Issue Offshore RMB Local Government Bonds in Hong Kong in 2022, which determined the list of members of the underwriting group of Hainan Province to issue offshore RMB local government bonds in Hong Kong in 2022. There are 17 financial institutions in the list of members of the bond underwriting syndicate to Hong Kong released by the Hainan Provincial Department of Finance, including 11 banking institutions such as Bank of China (Hong Kong) Co., Ltd., and securities institutions such as Guotai Jun'an Securities (Hong Kong) Co., Ltd.

Wang Shaohui, senior researcher of Hainan Institute of Finance of Bank of China, said that this issuance is a major measure to deepen the implementation of high-level opening up in Hainan. On the one hand, by "going global" to issue bonds overseas to attract foreign investors' attention and investment, it is conducive to improving the liquidity of the local bond market of the Free Trade Port, promoting the construction of the capital market of the Free Trade Port in line with international trade, and laying the foundation for a higher level and deeper two-way opening. On the other hand, the issuance of offshore RMB market bonds is conducive to guiding the value discovery of the international capital market for Hainan Free Trade Port, providing an important advantageous pricing benchmark for the market players of the free trade port to go to the international capital market for financing, leading and encouraging the market players to actively explore the international capital market, broaden financing channels, share the policy dividend of cross-border investment and financing facilitation, and gradually realize the "financing globalization" of the construction of the free trade port, Inject new vitality into the free trade port market economy.

Wang Shaohui introduced that this issuance will enrich the people's offshore bond market and boost people's internationalization. The offshore RMB bond market is an important driving force for RMB internationalization. Since July 2007, when China Development Bank issued RMB 5 billion bonds in Hong Kong for the first time, opening the prelude to the offshore RMB bond market, the RMB offshore bond market has been expanding in issuance scale, with more and more varieties, subjects and places of issuance, which has promoted the deep integration of offshore RMB bonds into the international trade and financial market.

"The issuance of offshore RMB bonds in Hainan Province enriches the types of offshore RMB bonds in terms of varieties, which is of great significance in promoting green and sustainable development and helping to achieve the goal of" double carbon ". It will help anchor the investment philosophy and preference of international investors for sustainable development, enhance the vitality of the offshore RMB bond market, help the process of RMB internationalization, and strengthen the development of international trade The Bank also deepened the financial cooperation between Hainan and Hong Kong, which will further enhance Hong Kong's important position as the global offshore RMB business center, help Hainan Free Trade Port establish a good image in the international trade capital market, expand international popularity, and practice financial innovation and high-level openness. " Wang Shaohui said.

The report of the Twentieth National Congress pointed out that it is necessary to "adhere to a high level of opening up, accelerate the construction of a new development pattern with the domestic big cycle as the main body and the domestic and international double cycles promoting each other", and emphasized that "enhance the endogenous power and reliability of the domestic big cycle, and improve the quality and level of the international cycle". In terms of financial opening, Hainan Free Trade Port emphasizes the principle of serving the real economy and opening capital projects in stages.

Wang Shaohui believed that, from an internal perspective, under the background that the domestic capital market has not yet been fully opened and Hainan's capital market has not yet matured, issuing offshore RMB bonds can better support the Free Trade Port to make full use of the international and domestic resources and markets, raise funds through multiple channels, improve the quality and efficiency of direct finance, and give full play to the role of finance in serving the construction of the Free Trade Port and supporting the real economy under the new development pattern of double circulation. Outwardly, the report of the 20th National Congress of the Communist Party of China put forward the primary task of adhering to high-quality development. As the intersection of domestic and international double cycles, Hainan Free Trade Port will have greater achievements in continuing to promote high-level opening up. Hainan Free Trade Port offshore RMB bonds will enrich the offshore financial market product categories and RMB use scenarios, provide good RMB investment channels, meet the needs of international investors, and provide better international financial service support for the dual cycle development.