Multinational companies are flocking to China’s bond market at a record rate as they try to secure cheaper financing and hedge against deteriorating relations between Beijing and the US. So-called panda bond issuance — renminbi borrowing by overseas companies in mainland Chinese markets — hit Rmb194.8bn ($26.5bn) in 2024, the highest level on record for a full year. In the first quarter of this year it reached Rmb41.6bn, its second-best quarterly issuance since the World Bank and Asian Development Bank sold the first such bonds in 2005. Mercedes-Benz, HSBC and Trafigura are among the foreign groups that have driven the wave of fundraising. Many companies are keen to take advantage of Chinese interest rates that are much lower than those elsewhere, for instance in the US and Europe. The issuance marks a shift in strategy by global companies to issue debt for their China subsidiaries locally, rather than raising funds abroad and then transferring the money to their Chinese unit. Analysts say this so-called “in China for China” strategy could help foreign groups reduce transaction costs — or even hedge against potential financial restrictions on their local units if the US-China trade war escalates.
“You aren’t going to like what comes after America,” the great bard Leonard Cohen famously wrote. Perhaps he is being proved right — at least this is not the America we thought we knew. (“I’ve seen the future,” Cohen also sang, “it is murder.”) Guessing the endgame of President Donald Trump’s policies is a fool’s errand. But it would be a fool, too, who didn’t try to prepare for a world from which the US has withdrawn — economically, militarily and diplomatically. So here in Free Lunch, I want to start an occasional series of pieces on how the world, and in particular (the rest of) the liberal democratic west, might cope with a US-sized hole in its heart. Send me your thoughts at freelunch@ft.com. My thoughts today are about international governance — where I bring, I hope, some good news, at any rate better than what Cohen would have us fear. The Maga modus operandi in international affairs is now familiar. The polite word for it is bilateralism. More harshly, it’s divide and r...
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