# Offshore Borrowing in Renminbi Reaches Nearly $150 Billion This Year

Foreign issuers are raising Chinese currency at low onshore rates, extending the renminbi's role from a settlement currency to a funding currency.

- Published: 2026-09-08T05:13:34.188Z
- Canonical: https://polylog.news/2026-09-08/offshore-borrowing-in-renminbi-reaches-nearly-150-billion-th
- Publisher: Polylog (Global desk)
- Section: macro
- Sources: [Financial Times](https://www.ft.com/content/1de12ab6-0343-4113-a832-b0f11c3a9b7a?syn-25a6b1a6=1), [South China Morning Post](https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3366710/hong-kong-boon-kazakhstans-advanced-manufacturing-ambitions-ties-europe-expert?utm_source=rss_feed), [Kommersant](https://www.kommersant.ru/doc/8938598)

The Financial Times reports that [issuance of dim sum and panda bonds has passed $149 billion so far this year](https://www.ft.com/content/1de12ab6-0343-4113-a832-b0f11c3a9b7a?syn-25a6b1a6=1), which it describes as a record for offshore borrowing in renminbi. Dim sum bonds are renminbi bonds sold outside mainland China, mostly in Hong Kong. Panda bonds are renminbi bonds sold inside China by foreign issuers. Both markets are drawing borrowers for the same reason: Chinese funding costs are low relative to dollar and euro funding costs, and the gap has persisted long enough for treasurers to build it into their plans.

Two other developments this week fit the same pattern. A Kazakh government adviser told the South China Morning Post that [Hong Kong's capital markets could finance Central Asian manufacturing](https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3366710/hong-kong-boon-kazakhstans-advanced-manufacturing-ambitions-ties-europe-expert?utm_source=rss_feed) and serve as a base for advanced production aimed at Europe. Separately, Kommersant, citing Chinese customs data, reported that [trade between Russia and China rose 28.4 percent in the first eight months of the year to $185.05 billion](https://www.kommersant.ru/doc/8938598), a flow that is now settled overwhelmingly outside the dollar.

None of this displaces the dollar as the world's reserve asset. Chinese capital controls remain, and foreign holders of renminbi cannot move it as freely as dollars. What is changing is narrower and more concrete. When a European bank or a Middle Eastern sovereign borrower can fund more cheaply in renminbi than in dollars, it does, and each such transaction builds a market with real depth, real pricing and real intermediaries. Reserve currency status historically follows funding and invoicing habits rather than preceding them.

## What this means

A borrower who funds in renminbi acquires renminbi liabilities that must be serviced in renminbi, which creates ongoing demand for the currency that does not depend on Chinese policy or on any political decision to dedollarize. That is a slower and more durable channel than reserve reallocation. Dollar funding markets lose marginal issuance volume, Hong Kong intermediaries gain fee income, and borrowers in Central Asia, the Gulf and Latin America gain a second funding option that reduces their exposure to Federal Reserve policy.

## What to watch

- Whether the gap between Chinese and dollar funding costs persists, since the entire flow depends on it and would reverse quickly if Chinese rates rose or United States rates fell.
- The share of new issuance coming from non-Chinese borrowers with no China business, which is the clearest sign the renminbi is being used as a funding currency rather than a trade-settlement convenience.
- Any relaxation of Chinese capital controls on outbound renminbi, which is the main remaining constraint on foreign holders treating the currency as a reserve asset.