China to waive panda bond fees through 2028 to bolster global yuan debt market
Analysts say removing some expenses for foreign borrowers will help funnel more yuan overseas and create a large offshore liquidity pool of China’s currency
China has unveiled plans to waive issuance and servicing fees for panda bonds, adding fresh policy support to a market that has seen a surge in foreign borrowers seeking yuan funding amid a global “de-dollarisation” trend.
China Central Depository and Clearing – the state-backed depository and clearing house serving much of China’s interbank bond market – said in a notice seeking public comment on Monday that the proposed measures would take effect from September and run through the end of 2028.
The proposal came as the issuance of panda bonds – yuan-denominated debt sold by foreign entities in China’s domestic market – surged 69 per cent in the first half of the year, according to data from the People’s Bank of China. Overseas borrowers are increasingly tapping the market to diversify away from the US dollar.
While the waived fees represent a small fraction of the total borrowing costs – which also include interest payments, underwriting and legal expenses – analysts said the move served as a strong sign of Beijing’s commitment to the panda bond market.
Xu Tianchen, senior economist at the Economist Intelligence Unit (EIU), said the proposal was the latest in a series of measures aimed at boosting panda bond issuance. EIU calculations showed that the year-to-date issuance had already exceeded the full-year total for 2025, he said.
“Beijing is systematically pushing for phase two of yuan internationalisation – this time the focus is on the capital account,” Xu said. “By encouraging panda bond issuance, it will funnel more yuan overseas and create a large offshore yuan liquidity pool.”