Will the panda eat dim sum for breakfast?
The mainland's securities regulator is looking at the possibility of letting foreign companies raise money by issuing so-called panda bonds on the Shanghai Stock Exchange - a move that could dent Hong Kong's lucrative dim sum bond business.
The China Securities Regulatory Commission (CSRC), under new chairman Guo Shuqing, is studying the option of letting overseas firms sell yuan-denominated bonds on the Shanghai bourse in a move that is likely to create a debt market running into hundreds of billions of yuan, say sources.
The proposal follows Guo's recent decision to put on hold a long-awaited international board allowing foreign companies to launch yuan-denominated IPOs in Shanghai, but it underpins his resolution to bolster the nascent bond market.
Beijing embarked on a pilot scheme in 2005, and so far it has allowed only a handful of foreign financial institutions, including the Asian Development Bank, to offer panda bonds issued on the interbank market.
The central bank and the National Development and Reform Commission (NDRC) have the final say on the sales of panda bonds, originally designed to widen yuan investment channels.
The Shanghai exchange's pending liberalisation of bond sales, if it happens, would be a big breakthrough since it would expand the panda bonds programme, allowing foreign non-financial institutions to sell debt on both the interbank and stock markets.