China to Issue 5 Billion Yuan Bonds to Macau, Supporting Economic Diversification.
In a bid to diversify Macau’s economy and reduce reliance on its gaming sector, China plans to issue 5 billion yuan ($685 million) in sovereign bonds to Macau. This follows the remarkable growth of Macau’s gaming sector, which accounted for over half of the province’s GDP.
The August revenues stood at MOP 17.21 billion ($2.14 billion), marking a significant annual growth of 686%. As part of its economic diversification strategy, China has previously issued 2 billion yuan bonds in 2019 and 3 billion yuan bonds in 2022 to Macau.
The issuance of these bonds also aims to promote the use of the yuan currency in Macau, shifting away from the Macanese Pataca. The bonds are scheduled to be issued on September 20.
This move is expected to strengthen financial cooperation between mainland China and Macau, offering secure and stable investment options for investors. Gordon Tsui Luen-on, Director of Hong Kong Securities Association, emphasized that the issuance of yuan bonds in Macau demonstrates the central government’s commitment to supporting economic diversification and encouraging international investors to buy offshore yuan bonds.
By supporting Macau’s economic diversification and promoting the internationalization of the yuan, these bonds present an attractive opportunity for institutional investors looking to increase their yuan assets.
Official statement: “The issuance of these bonds will further strengthen financial cooperation between mainland China and Macau, providing investors with secure and stable investment options.”