China plans to sell 30-year yuan bond in Hong Kong after hiatus

China is resuming issuance of 30-year government bonds in Hong Kong after a long hiatus, a move that will help set a benchmark for offshore issuers joining a boom in yuan borrowing.

The finance ministry plans to sell a total 12.5 billion yuan (HK$13.32 billion) of yuan-denominated notes next week with tenors ranging from two to 30 years, according to a Thursday statement by Hong Kong Monetary Authority. The one-billion-yuan issuance for the 30-year note will be the Chinese government’s first such offer in the city since 2016, according to Bloomberg-compiled data.

Funding in the yuan has become appealing as Chinese policymakers kept interest rates low to support the economy. Hong Kong’s Airport Authority tapped the so-called dim sum bond market in January, helping to extend a record issuance for the notes in 2024. Long-term bonds have seen strong supply as firms like Temasek sought to lock in cheap borrowing costs.

“This is in line with our expectation that China MoF will resume the ultra-long-end bond issuance in the CNH market in 2025,” to meet increasing demand for an up-to-date benchmark, said Xiaojia Zhi, chief China economist at Credit Agricole CIB. This follows “more active bond funding activities in the ultra long end of the curve since 2024,” Zhi added.