Further Steps To Open The Chinese Corporate Bond Market

Recent action by Chinese regulators is set to ease some of the difficulties encountered by Chinese companies (including foreign owned subsidiaries and joint ventures) in raising capital, and provide new business opportunities for foreign incorporated local banks.

Lower threshold for corporate bond issues

The People's Bank of China (PBOC) issued a notice on 7 January 2009 (PBOC Notice No.1, 2009) removing the minimum threshold for bonds issued in the Chinese inter-bank market. This move will allow unlisted enterprises greater access to the emerging corporate bond market and be of particular benefit to many small to medium sized enterprises that previously were excluded from the bond market because of a RMB 500 million (US$73.2 million) minimum issue limit which has applied since 2004.